What is Foreclosure
Foreclosure is the elimination of all rights of the homeowner covered by a mortgage and a process in which the homeowner’s property becomes the absolute ownership of the lending institution. Foreclosure filings are increasing; approximately 4.8 million of homes nationwide are facing foreclosure. Estimates suggest another 7.3 million Americans expected to default on their loans between 2009-2010, 1.2 million in Florida.
Florida is the third leading state in the United States in Foreclosure filings. Miami-Dade County alone has experienced approximately 54,040 Foreclosure filings in 2008. According to a recent Miami Herald article, “compared to a year ago, the rate in Broward County rose 53 percent and 97 percent in Miami-Dade County. These figures mean one of every 114 homes in Broward County is either going into foreclosure or already bank-owned. In Miami-Dade, there is one foreclosure for every 93 homes.”
The Foreclosure process begins when the homeowner fails to make mortgage payments. This could be for to several reasons: unemployment, medical expenses, divorce, adjustable rate resets, increased real estate taxes, death and more.
Legal proceedings begin with a formal demand for payment which is a letter issued from the lender. This letter is referred to as a Notice of Default or Acceleration Letter. Usually the lender will send this notice when the borrower has been 3 months delinquent on the mortgage payments. This notice is a threat to terminate all your rights in that property, sell the property, and evict you from the premises.
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