What is foreclosure?
Foreclosure is a legal action used by a mortgage company to recover any money from a customer when the customer does not pay his or her debt in accordance with the mortgage agreement. In other words, it's the legal remedy used by a mortgage company to assume ownership of a property when the required loan payments are not made. Foreclosure obliterates otherwise good credit.
How does foreclosure happen?
Although the actual process varies from state to state, foreclosure revolves around a homeowner's inability to keep up with monthly mortgage payments. The farther behind the homeowner gets, the closer to foreclosure the homeowner becomes.
Is anyone exempt from foreclosure?
No. Everyone with a mortgage is subject to foreclosure, should non-payment become an issue.
How common is foreclosure?
1,351 Orange County homeowners lost their homes to foreclosure in July 2008. It was the fourth time in 2008 that the monthly foreclosure record had been shattered. This is a drastic change compared to previous years— there were 367 reported foreclosures in Orange County in July 2007, and only 44 foreclosures in July 2006. Additionally, lenders mailed-out 2,320 notices of default – the first step in the foreclosure process – in July 2008 in Orange County.