Foreclosure is not something that is wished upon any property owner, and Ohio homeowners may not realize that lenders do not usually start such drastic actions for a single late payment. A late payment notice may be sent, and if it remains unpaid, the mortgage holder may try to make contact to arrange negotiations to reach an agreement that may help the homeowner to bring payments current. Only when no solution can be found will foreclosure proceedings be set in motion.
During a foreclosure, generally, the lender takes ownership of the property and sells it at an auction. The proceeds are then used to pay the outstanding mortgage. The legal procedures related to foreclosures vary in different states, but the general pattern is similar. The lender will advise the property owner of its intention to foreclose before filing the request in court.
The homeowner retains the right to fight the foreclosure in court, but, if that fails, the property will be sold. If the sale yields less money than required to cover the outstanding loan, the lender may sue the property owner for the balance. However, ways exist that allow foreclosure to be stopped.
Any Ohio resident who is threatened with foreclosure may find comfort in knowing that the U.S. Bankruptcy Code offers property owners protection against such actions. A consultation with an experienced bankruptcy attorney can explain how filing for personal bankruptcy can put a stop to any debt collection actions, including foreclosure. While mortgage debt will not be discharged like other unsecured debts, homeowners may be offered opportunities to catch up on mortgage payments over an extended period.
Source: homeguides.sfgate.com, "What is Property Foreclosure?", Fraser Sherman, Accessed on May 7, 2016