Many homeowners have questions about how foreclosure works and how long they have between when they miss a payment and when the bank actually forecloses. If you’re wondering how much time you have before you have to leave, it depends on whether your case will be handled in a judicial foreclosure or a non-judicial foreclosure. Most states allow both, but some states only allow one or the other, so you’ll have to do some research to find out which one is yours for sure, but yours most likely won’t be judicial because it moves faster and costs less to the lender.
– You do not make your first payment (for example, we will say that this is your payment for July and it was due on July 1).
– Your grace period expires (usually 15 days) and you have not paid. Your lender now considers your late payment. It is not uncommon to start receiving letters or phone calls from them at this time. Don’t ignore these phone calls.
– At most lenders, once you are 60 days late (September 2 in our case), your loan is considered delinquent and the lender can start the judicial or extrajudicial foreclosure process. To bring your loan current up to this point, you will generally need to pay all amounts due (your July and August payments), all late fees, and your September payment.
This is where lenders have the most flexibility in the process.. They are not required to enter the foreclosure process simply because it is a certain number of days overdue. If you are in communication with them and have made a plan to get back on track, you can avoid foreclosure altogether, but you must take action.
– Your lender’s attorney will file a complaint with your county court and request a hearing date. This usually doesn’t happen until you are more than 90 days late.
– You will be given a notice of this complaint.
– A hearing will be held in your county to determine the sufficiency of the complaint. If you think you have legal grounds to contest foreclosure, this is where you and your attorney would argue those grounds. At the end of this hearing, the judge will decide if the complaint is sufficient or not. If so, the foreclosure sale will be scheduled and your credit history will be marked as in foreclosure. If it is not enough, the judge will dismiss it. The duration of all this depends on the courts in your area. Usually it takes about 30-60 days.
– A date will be set for the redemption of the property if the laws of your state stipulate it. You can still bring your loan (including fees, etc.) up to date of redemption. Even if the house has been sold and someone has moved in, if the redemption date hasn’t passed, you can still get your house back…if you can get enough money.
– A date will be set for the foreclosure auction. This usually happens between 30 and 45 days after the sufficiency hearing.
*** A judicial foreclosure typically takes between 6 months and 2 years from start to finish. ***
– Your lender will send you a Notice of Default in the mail.
– Your lender will send you a Notice of Sale to let you know when your home will be sold at the foreclosure auction.
*** A non-judicial foreclosure typically takes between 1 month and 1 year to complete. ***
– The foreclosure sale occurs and your home is sold. In about 90-95% of cases, your first mortgage owner wins the auction because he bid the amount you owe on that loan, and usually no one else will go higher than that.
Your landlord then contacts the county sheriff, who places an eviction notice on your door. This notice gives you 24 to 72 hours to leave the house and remove all belongings from it. If he is there when the sheriff returns, he will escort you off the premises and anything left on the property will belong to the new owner.