House Repossession & Bank Greed
Unfortunately, there have been many people who have faced the dreaded process of having their home repossessed. When we hear of a home repossession, though, it is often made to sound like a quick process and that people are quickly being evicted from their homes. This is not the case though as a repossession can take months and sometimes even years to complete, and those who have the means to fight the process can halt the process or even stop it entirely with the proper guide.
How The Repossession Process Works
The first thing that will happen is that the bank, or mortgage lender, will send you a notice of default. This notice of default is a document that states that you have defaulted on your payments and will tell you what steps you will need to take to get back in good standing. This letter could come as soon as you have missed only one payment, but it will undoubtedly come after three or four payments have been missed.
Once you have received your letter, this would be a good time to call your lender and discuss with them what options are available to you. You should inquire about getting your loan modified or even selling your home so that the process does not accelerate further.
Once the letter of default has been sent to you, the lender will then have to file for a repossession. The laws vary from state to state at this point in determining how quickly this process moves in the repossession process. And depending on how backlogged the system is, and possibly other factors, the process could take two years, or even more. At this point, you could try selling your home, but lenders will be less likely to work with you.
After the repossession has been pushed through the legal system, a date will be set for your home to be auctioned off. The auction process consists of bidders joining to bid on your house. You are even allowed to place a bid yourself if you have managed to get enough cash together, but once the house is sold, it is sold.
After your house has been repossessed, there will be credit consequences that you will face. A repossession on your report can drop your score by 300 points and will stay on there for up to seven years. Once a repossession hits your credit score you will probably not be able to purchase a home for at least two years. And if you can purchase one there is a good chance that you will have a much higher mortgage rate for the next five to seven years.
Obviously, getting your home repossessed is not a process that anyone, anywhere, would want to go through. There are options available to help you stop, or stall the process. If you are unable to halt the process, you should know that there is a light at the end of the tunnel. Nothing bad lasts forever, and while getting your home repossessed is not something that is a fun process, at least you will now have an idea of what to expect.