The circumstances leading to foreclosure litigation and the processes involved.

The process of foreclosure usually involves a process of filing a lawsuit to foreclose on a real estate. Sometimes there can be cases where the lenders foreclose without even filing a lawsuit. Anyways, foreclosure litigation though is a term that is heard and known by many, few actually have the idea as to what it all really means and what are the processes involved. It is a sad business, though, and those who have to go through the process can really feel the pain of losing one’s property or home. Thought this kind of litigation the lender who lends the homeowner money for the property tries to recover that amount as the homeowner is somehow not able to give it back. Generally, the process is actually to take over the property of the debtor by taking the ownership rights or just selling off the property to recover the loan amount. The lender of the loan is supposed to file the suitable documents with the proper authority so that the process of foreclosure can be initiated. There can be a number of reasons for which the homeowner is unable to pay off the debts incurred on the loan. There can be personal calamities like illness, death, loss of employment, military deployment, loss of inheritance, family issues like divorce or such, for which the homeowner was not able to pay the required amount. But there can be cases of fraud also, where the homeowner actually has no intention of paying off the money. But in the case of genuine life altering events, it can be tragic to lose the roof over one’s head. But since the law is strict regarding these matters, hence nothing can be done in individual cases where the cause of nonpayment can be genuine. There are other issues like Option ARM, Adjustable Rate or ARM, Interest Only loan, or Negative Amortization, that leaves no room for evading foreclosure litigation. The process is started after the payments does not come in from the homeowner’s end even after different attempts to recover the same has been made by the bank or the lender. When these attempts fail to get any positive response there is no other option but to begin the process of foreclosure. A grace period is usually allowed by the lender which is usually between ten to fifteen days. Even after this grace period, if the homeowner is unable to pay, or several payments are missed then an overdue or late charge is assessed. After that comes the part where the borrower is tagged as a defaulter when even after this grace period also, he or she is unable to come up with any money towards the payment. During this time letters are sent from the lender’s side and phone calls are made as a last resort. After this, there is nothing else to do but to refer the loan to the loss mitigation department/foreclosure department when the borrower is still unable to pay. An atto ey is generally employed from the lender’s side to handle the case of foreclosure litigation. The necessary papers are filed with the public trustee by the lender's legal representative. A NED or a Notice of Election and Demand is then filed by the public trustee with the recorder and the country clerk. Once this process is taken care of, within a period of 110-125 days the property is scheduled to be sold at a public trustee auction.