Foreclosure Timeline
Foreclosure timelines are different in all 50 states. If
you are having a hard time making your loan payments, then
you should look into your state's
foreclosure laws.
Differences among the states range from the mortgage lender
notices that must be mailed or posted, buyback periods to
the scheduling regarding the lenders sale of the property.
Below is a general understanding of the foreclosure
timeline, but keep in mind the state where you reside will
have its own laws. Few individuals believe that they
will fall behind on payments and lose their home, they
always believe they have more time.
Below is a general understanding of the
foreclosure timeline.
Note:
Foreclosure Timelines do vary by state
(Day 1+ Late)
1st mortgage payment missed - your mortgage lender will
contact you by phone or mail and a late charge will be assessed, usually
after the payments been late for more than 15 days.
(Day 30+ Late)
2nd mortgage payment missed - your mortgage lender is
going to begin calling you to talk about why mortgage payments have not been
made. It is essential that homeowners take these phone calls. Talking to
your lender and explaining your financial situation is absolutely critical
to solving the problem. Now that your 1st mortgage payment is more than 30
days late and you will receive one 30 day late on your credit, which will in
all honesty will crush your credit score. Even if you have established
credit, a mortgage late is to be avoided at all cost.
(Day 60+ Late)
3rd mortgage payment missed - once the 3rd payment is
missed, you will receive a letter from you lender telling you the amount you
are delinquent, and that you have 30 days to bring the mortgage up-to-date.
This is usually called either a demand letter or notice to accelerate. If
you do not pay the set amount or make some types of arrangements by the
established date, the lender may start foreclosure proceedings. They are
unlikely to accept less than the total due without prior arrangements being
made if you receive this certified letter. You do however, still have time
to work something out with your mortgage lender before the foreclosure
process starts.
(Day 90+ Late)
4th mortgage payment missed - you are now approaching
the end of a timeline which was allowed in your demand or notice to
accelerate letter. When the 30 days ends, if you still have not paid the
full amount or made arrangements you'll be referred to your lender's
attorney. You will also incur all attorney fees as part of your delinquency.
Depending on where the house is located, the mortgage lender might record
an official notice of foreclosure at the local courthouse, print details of
the debt in the local newspaper, and attend hearings on the case.
(Day 150+ Late)
Public Trustee's or Sheriff's Sale - Sale of the
property will often be scheduled by the lenders attorney. This would be
known as the day of foreclosure. You could be notified of the date by mail,
a notice taped to your door, and/or the property sale could be advertised in
a local paper. The duration between the notice to accelerate or demand
letter and the actual foreclosure sale vary by state. Some states may be as
quick as 2-3 months although states do vary. At this point your move-out
date is near. You have until the sale date to make arrangements with your
lender, or pay in full the amount owed, including attorney fees.
The Redemption Period
Redemption is the period of time after your home has been sold at a
Public Trustee's or Sheriff's Sale, but you can still reclaim your
house. Paying the full outstanding mortgage balance and all costs
incurred during the foreclosure process is the only way to reclaim your
house during the redemption period. Many states do in fact have some
sort of redemption period, availability is frequently determined by
whether the foreclosure is judicial or non-judicial and procedures can
vary greatly from state to state.
Important: Staying in contact with your lender is your single best choice
to have a chance of staying in your house and be very careful of the many
companies promising loan modification for a large fee. All dates are
estimated, and vary according to your state and your lending company.
Types of foreclosure
There are three types of foreclosures which could be started at this
time: judicial, strict foreclosure and power of sale. All three types of
foreclosure need public notices to be issued and all parties involved to be
given notice regarding the proceedings. Once homes are sold through an
auction, families will only have a small amount of time to move out before
the sheriff issues an eviction order.
Judicial Foreclosure
Every state in the union allows this type of foreclosure, and some
require it. The mortgage lender files suit with the judicial system, and
the homeowner should then receive a note by mail demanding payment. The
borrower then has just 30 days to answer with a payment in order to fend
off foreclosure. If the payment is not made after a particular period of
time, the mortgaged property is then sold through an auction to the
highest bidder, a sheriff's office or local court will generally carry
this out.
Strict Foreclosure
A small number of states actually allow this type of foreclosure as
it favors the lenders tremendously. In strict foreclosure proceedings,
the mortgage lender files a lawsuit on homeowner who has defaulted. If
the borrower isn't able to pay the mortgage within a certain timeline
which is ordered by the court, the home goes directly back to the
mortgage holder. Strict foreclosure generally takes place only when the
debt amount is larger than the appraised value of the property.
Power of Sale
This type of foreclosure, also recognized as statutory foreclosure,
is permitted by many states if the mortgage includes a power of sale
clause. Once a borrower has defaulted on mortgage payments, the mortgage
lender sends out notices requiring payments. Once an established waiting
period has passed, the lender, instead of local courts or the sheriff's
office carries out the public auction. Non-judicial foreclosure auctions
are frequently more expedient, though they could be subjected to
judicial review to ensure the legality of the proceedings.
Foreclosure Timeline is subject to change.