Foreclosure is a legal process where the mortgage holder gains ownership to your land and has the right to sell the property in which proceeds will be used to pay off the mortgage if you are in payment defaults. It usually occurs when you have failed to make the payments and have violated the mortgage terms. There are two types of foreclosure: judicial and non-judicial. Judicial foreclosures are overseen by court and it involves the lender filing a lawsuit for the right to foreclose the property. It is an expensive process and very time consuming which is why most lenders prefer the non-judicial foreclosure. Non-judicial foreclosure, on the other hand, is much simpler and does not require court intervention.
In both process, the land owner receives legal notice of foreclosure. The notice will then be published in local papers and the property will be sold in an auction. Foreclosure processes may vary from different states but the mortgagor can initiate the proceedings as early as 30 days after the missed payment.
Foreclosure can have a devastating impact to land owners. Bad credit score is probably the most damaging results of foreclosure. When your land is foreclosed by a lending company, you are at risk of having a bad credit score. Opening new lines of credit and getting new loans are almost impossible. The size of impact depends on whether your debt was forgiven and the amount you still have to pay before the foreclosure. Bigger delinquent amount can result to a more damaging credit score. Another consequence to foreclosure is loss of property. As mentioned earlier, the lender will take ownership of the land that a loan was approved for. If the land holds a sentimental value to the owner, he can bid at the auction and attempt to purchase the land. However, this is very unlikely because the land will be more expensive as compared to paying off the loan in the first place. If you have been foreclosed in the past, you might find yourself in trouble keeping and finding new employment. Some employers consider a good credit score as basis for employment and a bad credit score as grounds for termination.
You can actually prevent foreclosure by selling your land. Although, loss of property is unavoidable, this is less damage compared to getting a bad credit score or being fired from your job. With a good credit score and stable job, you can acquire new properties in due time. Contact Lucas Properties LLC if you want to sell your land quickly. They will give you cash for your land in “as is” basis so you don’t have to worry about spending money for repairs or cleaning.