Foreclosures in a nutshell

foreclosures | Highlands Ranch | Randall Brennan

There’s been a lot of activity in the foreclosure world lately. I’m sure you’ve heard all about it. Not everyone fully understands what foreclosures are, though, so I thought I’d do a little post on the subject.

The first thing you need to understand is what the term actually means. According to our old pal, dictionary.com, the definition is as shown below. The most common usage is the first one, just based on what’s going on in the world. The most traditional definition, though, is the second one. When someone forecloses on your house, it’s really you who is being foreclosed on. You are being shut out, and prevented from owning and using the house anymore. Not a comforting thought, is it?

Highlands Ranch foreclosures | Randall Brennan

So what happens in a foreclosure? How does one come about? Recall that when buying a house, most people use some kind of mortgage financing. They are borrowing money from a bank or mortgage company, and in return they are promising to pay the loan back. The buyers are using the house as collateral on the loan, and, in the note and mortgage or deed of trust, they are making certain promises beyond just paying back the money on time. Mostly, they are promising to take care of the collateral and keep it in good condition and within the bounds of the law and your Home Owners’ Association.

Did you know that your HOA can foreclose on you as well as your lender? Did you know that you can be foreclosed on even if you’ve never been a minute late with your payments? It’s true. If you don’t keep the property up to snuff, or if you are a chronic violator of the neighborhood covenants and rules, they can. Will they? To be honest, it’s a pretty rare circumstance that anyone is foreclosed on for anything other than missing a lot of payments, but you need to be aware that the documents you signed at closing give away those rights. If you haven’t done it already, I’d advise you to take a look at them closely.

So how does the foreclosure process work? Honestly, it’s complicated, with a lot variables. I’m going to reserve an entire post for it. Keep an eye open for that.

What’s next? Take your pick.

 

 Randall Brennan | search for homes | Highlands Ranch real estate

Yeah. You should probably do at least one of those things right now.