The many aspects of foreclosure litigation and the stages involved in the same

The term litigation seems daunting when you first hear about it. It brings to mind of a problematic legal procedure which can result in someone’s ruin. The same goes for litigations related to foreclosure. But it is better to know what the term actually means rather than having a vague idea and think of it as something that can never happen to you. Life is uncertain and you never know when you might have to face situations you never dreamed about, which can be distressing as well as disastrous. It is actually a process through which the lender can recover the amount that he or she lend out to a certain individual who is now not in s situation to pay back the loan or is simply refusing to pay back. The amount owed on a defaulted loan is generally recovered through foreclosure litigation by either selling the property or the house of the debtor or by taking ownership of the same. It is an unfortunate situation and not always intentional on part of the debtor. There can be many adversities which can tie the hands of a person and cause a financial crisis which can result in such a circumstance where a homeowner loses his property.

The process of the litigation is started when the lender files the appropriate documents with the suitable officials. As discussed above there can be a variety of reasons that demands the litigation process to be initiated. An individual can be in a dire financial state where he or she is unable to pay the loan money back. Reasons can be many like a recent death or divorce, loss of employment or losses suffered in business, prolonged sickness and the hefty medical bills for treatment of the same, other family issues like disinheritance, sudden military deployment, etc and the list can go on. There are no ways to escape these hardships and often people find it impossible to pay back the home loans which ultimately leads to a situation where there is only the option of litigation. Bank gives some time to the homeowner and then makes several attempts to collect the loan amount but even after that if the homeowner is unable to come up with the required sum of money there is no other option left but to start the process of foreclosure.

The homeowner is allowed a grace period by the lender which can be anywhere between ten to fifteen days and usually does not stretch beyond that. If payment is missed even after this grace period then a late charge is assessed. The borrower becomes a defaulter if even after all these attempts there is no payment from his or her side. Letters are sent and phone calls are made as a last resort to give the borrower another chance but if there is no positive response from the borrowers’ end. Even to save the debtor from this ill-fated predicament a loan adjustment plan or a refund plan is offered. But then if the debtor is unable to come up with a payment plan then the loan is referred to the foreclosure department or the loss mitigation department, and an attorney is employed to look after the entire matter of the foreclosure litigation. The lender’s attorney then files the required documents with the public trustee who then files a NED. The property is listed to be sold at a Public Trustee Sale once this entire procedure is completed, and that happens within a period of 110-125 days. If the homeowner wants to stop the Public Trustee Sale and redeem the property, he or she must file an "Intent to Cure" with the Public Trustee's office at least 15 days prior to the foreclosure sale. The homeowner has time to stop the procedure Till the noon of the day, after which the sale to redeem the property and bring back the loan amount begins.