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  • Writer's pictureForeclosure Recovery Solutions

Foreclosure Explained: How It Works and What You Need to Know

Foreclosure is a legal process that allows a lender to take possession of a property when the borrower cannot repay the loan. It's a stressful and emotional experience, but it's essential to understand how foreclosure works and how you can protect yourself, especially when it comes to tax foreclosures.

How Does Foreclosure Work?

When you take out a mortgage loan, the lender holds a lien on your property. If you fail to make payments, the lender can foreclose on your property and sell it to recover their money. But, in some cases, you may also face foreclosure for unpaid property taxes.

Property tax foreclosure happens when you don't pay your property taxes for an extended time.

The government or a tax lien investor can place a lien on your property and sell it at a tax foreclosure auction. The process can take several months or even years, depending on your state and the tax collector's policies.

At the auction, the property is sold to the highest bidder. You may be entitled to the excess funds if the sale price is higher than what you owe on your mortgage or property taxes. These funds are known as a "tax overage" or "mortgage overage," They can be a lifeline for homeowners who have lost their property.

What Can You Do to Avoid Foreclosure?

The best way to avoid foreclosure is to make your payments on time and in full. If you're struggling to make payments or pay property taxes, you can negotiate a payment plan with your lender or the tax collector. These agreements can help you stay home while you work to get back on your feet.

If you're facing foreclosure, it's important to seek professional help. A foreclosure attorney can help you understand your options and protect your rights. They may also be able to help you negotiate a settlement with your lender or the tax collector, which can help you avoid foreclosure and keep your home.

At Foreclosure Recovery Solutions, we understand how difficult it can be to face foreclosure or tax foreclosure. You may be entitled to a cash settlement if you've lost your home to foreclosure, including tax foreclosure. Contact us today to learn how we can help you recover what you're owed and get back on track.

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