As long as a home is mortgaged, it is subject to the conditions under which the contract was signed. And, consequently, they can seize a mortgaged house in case of non-payment of the installments. We review what the foreclosure and eviction process consists of and when it is activated, as well as the possibility of paying the amount in arrears to keep the home. To avoid problems, it is important to choose a loan according to our economic capacity.
What is the process of foreclosure and eviction of a home?
The seizure is the process through which the bank keeps the mortgaged property, which takes place as consequence of non-payment of mortgage payments, while the eviction of a home is the process through which the corresponding Administration forces residents to leave the property when it has already been seized, provided that they have not left voluntarily after it is carried out. seizure.
How long does an eviction take for non-payment of mortgage?
Although there is a tendency to think that the eviction process is quick, it is only carried out after a long process and that has several phases. In this sense, in order for the eviction for non-payment to occur, a process that has several phases must be carried out. Among them, the lawsuit, which runs after 12 defaults (in the case of paying the first half of the loan) or 15 defaults (in the case of paying the second half of the loan).
How many months of mortgage default does it take for an eviction?
Keep in mind that defaults correspond to the mortgage payments, which are monthly. Therefore, for an eviction to take place, it is necessary that, at least 12-15 months have passed (depending on the tranche of the loan that is being paid) since the first default has occurred. In addition, it must be taken into account that when the legal claim is executed, other phases of the eviction process are initiated, so that the execution of the eviction process can be extended even more depending on how long it takes to carry out the following phases of the process.
What is the process of foreclosure and eviction of a home?
To properly understand whether a foreclosed home can be repossessed, as well as when the eviction would take place, it is important to understand the process as a whole. This can be divided into 8 distinct steps:
Notice of default
It takes place after they have passed 15 days from the first default. In this case, the bank contacts the mortgage holder to inform him that the default has occurred and to ask if he is aware of this fact. This is an unofficial notice.
Official Communications
After a month of non-payment, the bank will initiate official communications. That is, more formal notices that can be received through letters, SMS to mobile phone, emails, etc.. In these communications, the bank will notify the problem and the importance of solving it as soon as possible.
Default entry
The next phase is called default, and it takes place when the 5 months of defaults. In this case, the debtor goes on to enter the so-called lists of defaulters, which has important implications at the credit level.
Legal or notarial claim
Finally, when 12 or 15 defaults have elapsed (depending on whether the first or second half of the loan is being paid), the bank will begin with the execution of the seizure process itself. This process begins with the filing a claim before the court or with a request before a notary. In order to make it effective, the bank must give the mortgage holder at least one month in case he wants and can get up to date with the payments, which would imply the cancellation of the process.
Registration of charges on property
The next phase is the registration of the charges on the property. That is, yesand requests the Property Registry to make the charges official that exist on the house.
Announcement of auction
Then we proceed to announce the date, time and auction starting price of the property, which is announced on the Notice Board of the City Council, as well as in the Property Registry and the courts. This call does not have to be specifically notified to the mortgaged, so it is important that it is the owner of the mortgage who is attentive to said call.
Holding the auction
At the announced time, the auction takes place. Through it, the house is auctioned and money is raised in order to pay off the mortgage debt. In this way, the property is awarded to the highest bidder. In addition, it must be borne in mind that, in the event that there are no offers higher than the stipulated minimum price, it will be the bank itself who can keep the house for 60% of its value. When the auction occurs is when, de facto, the foreclosure occurs and the mortgaged loses ownership of the home. However, this does not mean that you will pay off your debt with the bank. To pay off the debt with the bank, it will be necessary that the sale price of the house in the auction is equal to or greater than the debt contracted. In the case of not being, the mortgaged will continue to owe the bank the remaining part.
Release or eviction
Once the auction has been completed and the debtor has lost ownership of the property, they are invited to leave the home. If he does not abandon it voluntarily, the procedures for the execution of the eviction are initiated. In this case, the court is the one that indicates the date and time in which the new owner (which may be the bank) will come with a judicial commission and a locksmith to take over the property and change the lock. In some cases, this process is carried out accompanied by a police presence.
Can you get a foreclosed home if you pay back debt?
As we have seen, the foreclosure and eviction process for a foreclosed home is long and has different steps throughout the process. In this sense, it is important to bear in mind that, at least until the auction takes place, the debtor can stop the process. How? Making late payments for defaults, which will include, in addition to the corresponding fees, the interests associated with the delays due to non-payment.
The importance of choosing a mortgage according to our economic capacity
To avoid problems, it is essential to choose a suitable mortgage for our situation and our real economic capacity. Knowing the house that we can afford will help us to know what type of mortgage best suits our profile and, in this way, do not contract mortgage products that are above our possibilities and that can lead to non-payment situations that, unfortunately, can lead to a process of seizure and loss of the house.