Did you Give your Lender Permission to Sell your Property?

Depending on where you live and what kind of mortgage you have, your lender might be able to sell your home without taking you to court. When you originally got your loan that you are now in default of, you may have authorized your lender to take your home and sell it.

If you are unsure if the lender has to sue you or just let you know they're selling your property, go grab your loan documents right now and let us walk you through finding out what your lender will do next.

Step 1. The first thing you want to do is locate your state's foreclosure law to determine if your lender can use Judicial Foreclosure or Non-Judicial Foreclosure procedures. If your state only allows Judicial Foreclosure, then your lender must sue you in court to obtain an order to foreclose and sell your home.

However, if your state allows Non-Judicial Foreclosure, then you will need to examine your original loan documents. Read or skim through and look for a "power of sale" clause. If this clause is anywhere in the documents, then you have pre-authorized the lender to sell your home without having to sue. All they will have to do is publish notice that you have defaulted on the loan and that they intend to sell the property at auction.

Step 2. Now, go back to your state's laws and find out how, where, and when the lender must publish their notice of foreclosure or sheriff sale. They may have to publish your name and home address, along with the fact that you have not been paying your mortgage. The notice may appear in local newspapers, posted on the door of the courthouse, or in any other public place located in your county.

Step 3. If you know your lender can sell your home without having to sue you, then try and locate a notice of sale or notice of default that your lender may have sent to you. Hopefully you did not throw it away unopened or fail to pick it up at the post office if it was sent certified or registered mail. If the lender has sent you a copy of any notice, you can probably be assured it has been published elsewhere, as well.

Step 4. Once you know that you authorized the lender to sell the home, and they are publishing the sale date, you should call them immediately to start working on a solution. Or, if you have been working on a solution, call them and let them know you are willing to do whatever you can to postpone the sale and get out of foreclosure right away.

Now that you know how your lender can pursue the foreclosure, you can develop immediate plans to save your home and make sure your neighbors, friends, and family do not know that you are in default and that your property will be auctioned off.