Expert: Bill Iannelli - 10/10/2008

Question
I have a two part question. First is when do we know when
the actual "foreclosure" begins? Does it begin when you are
served a certain paperwork? Also, I just received my
property tax statements and home insurance statements,
these were normally paid out of escrow. Obviously since I
have fallen behind on the house and will most likely
foreclose (house up for auction in Nov.), will these
taxes/insurance fall under the foreclosure "umbrella" also
or do I have to someone come up for the money for this
before the end of the year!? (which I don't think I will be
able to do for the taxes but maybe I will be able to for
the insurance). Thanks!

Answer
You will receive a trustee sales notice via certified mail and it will also be posted on the property.  The notice will tell you when and where the sale will be along with the original balance amount.  Usually you will receive this 60 days before the sale, giving you plenty of notice.  Back taxes survive all prior liens.  They will have to be paid by the person purchasing the house or the bank if there is not a bidder at the sale.  That is something you don't need to worry about.  I would try and keep the insurance current until the sale date.  If something should happen to the house you still own it up until the property is sold or taken back by the bank.  Most people let both the insurance and taxes go months before the sale, they don't have the money to pay.