Mortgage Foreclosure ProcessThe mortgage foreclosure process follows judicial procedure in some states, and a non-judicial procedure in others. Several states have both, and the wording of the mortgage document indicates which one should be followed. The timeline is generally anywhere from three to six months. The first thing to understand about the home foreclosure process is that the bank is in the business of making money by charging interest on loans. They are not in the business of shuffling real estate around, and have no wish to be saddled with extra property that they will have to dispose of - probably for much less than they could receive if you fulfilled the term of your loan. This means it is in their own best interest to negotiate terms with you that allow you to retain your home and keep making payments. Judicial foreclosureThe foreclosure process in a judicial foreclosure state goes through a short series of steps. After three consecutive payments are missed and the lender has attempted to contact the buyer and enforce the mortgage agreement, the lender files a case with the court. If the borrower does not respond, a judgment is handed down in favor of the lender and a date for sale of the property is set, usually 30 days away.During the 30 day time period a notice of sale must be published and copies sent to all parties named in the mortgage agreement. The final publication and posting of the notice of sale on the property itself must take place no later than five days before the sale. If the buyer does nothing, the home will be sold at auction on the date of the sale as decreed by the judgment handed down by the court. In many states, the lender can still file for a deficiency judgment against the buyer for any balance owed which is not covered by the sale of the house. Non-Judicial ForeclosureIn a non-judicial state, the mortgage foreclosure process is often slower. Letters will be sent at intervals to the home buyer urging them to bring their mortgage current, and if no response is given, a demand letter will be drafted and sent by an attorney retained by the lender. Following that, a notice of default will be filed with the court, and the countdown begins.If there is still no action taken by the borrower within 20-30 days after the notice of default is sent, a notice of sale may be filed. At this time a sheriff's auction date will be set, typically 30 days from the date of filing. The notice of sale must be published and posted on the property itself, and copies sent to all parties listed as borrowers in the mortgage. In a non-judicial foreclosure, many states allow a period lasting 1-3 months after the sale for the buyer to make an arrangement to reclaim the property. Judicial foreclosures carry no such grace period, and lenders may also opt to pursue a deficiency judgment against the former buyer for the remaining balance of the loan if the house sells for less than the debt. The best way to stop a mortgage foreclosure process from running all the way to conclusion is to forestall it. Open communication with your lender early, get advice from an attorney, and try to work out an arrangement that will allow you to keep your home or at least save your credit.
California foreclosure process
Home from mortgage foreclosure process
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