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The CEO is responsible to establish if a workout loan or foreclosure is in the best interests of the credit union and the memberclient. Prudent workout arrangements, in the long term, can be in the best interest of both the credit union and the memberclient. However, when foreclosure is unavoidable, the credit union will seek legal counsel to consider all the risks associated with the foreclosure and the liquidation of the foreclosure.
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It is important to keep record of all expenses paid in the memberclient's folder, including legal, updated appraisals, title, etc. All collection costs will be added to the outstanding loan payoff balance.
Once the account has been forwarded to the attorney, if the owners of the property contact the attorney regarding reinstatement, it is important to refer them to our foreclosure attorney. The organization's acceptance of money/payment from the member client may remedy the default without total payment of expenses, and/or require the organization to re-initiate the foreclosure process. Our attorney will advise as to whether to accept any loan payments while the account is in the process of foreclosure.
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The attorney will file all required documentation with the appropriate judicial authority, advertise the property in appropriate media, provide the credit union with copies of all papers filed and documents created in the process. The trustee's sale date is usually 90 days from the date the paperwork is submitted to the proper authorities, although this can vary with the number of foreclosures being processed by the County and any delays along the way.
If a member client desires to reinstate their loan after the organization has initiated foreclosure, the member client must pay all past due payments plus any foreclosure (attorney) costs that have been incurred.
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