Becoming Familiar with the Foreclosure Process - A Complete Foreclosure Timeline
If you haven't already noticed…the housing bubble has burst and so have the dreams of many people. When the housing bubble went "pop" people were all of sudden stuck with mortgages that they could no longer afford. For whatever reason, they found themselves with a lot of house and no money to pay for it. The housing foreclosure process varies from state to state; therefore, it is important to find out the laws that apply according to the state in which you live.
Below is a general foreclosure timeline (again, the foreclosure laws varies state by state…but this timeline will give you a general idea as to what could happen should you fall behind in your mortgage payments).
- Your mortgage is due. Most mortgage companies allow for a 15 day grace period. Once 15 days have passed you are considered late and late fees will be applied.
- You mortgage payment is 16 days late. The grace period is up. You will now be charged late fees. You may receive a phone call or late notice in the mail asking for payment. If you have the money to pay your mortgage it would be a good idea to contact your mortgage company and let them know that the check is in the mail (you may be able to pay via check over the phone…ask the mortgage representative when you call).
- You are 30 days late. At this point, if you have still not paid your mortgage you can expect a phone call from the lending company. If you are feeling a bit warm…it's because at this stage, the lending company will begin to turn up the heat. If you know that you will not be able to pay your mortgage any time soon, now is the time to ask for help! Contact a HUD Approved Counseling Agency for advice! They will be able to assist you with a wide variety of housing issues including late mortgage payments. HUD approved counseling agencies will work directly with your mortgage company in order to come up with a way for you to STAY in your home…at least for the time being.
- Your mortgage is between 45 and 60 days past due. At this point, if you have still not made ANY payments and you have not yet contacted your mortgage company…well, you are in trouble! At this stage of the game (if you have not contacted your lender in any way, shape or form) the lender will turn over your paperwork to an attorney so that the foreclosure process can begin. You will receive (in the mail) a letter or notice of default (in some states it is called a notice of delinquency). This notice will inform you of the exact amount that you must pay in order to keep your home. Now is the time to contact your lender…do not pass go, do not collect $200. Though the situation is very serious at this stage, do not panic. Now is the time to work not only with your lender…but a reputable HUD approved counseling service as well.
- Your mortgage is now 60 days or more past due. Once your mortgage is past the 60 day mark, you will receive a notice in the mail called a "Notice of Acceleration" (the name of this notice may vary from state to state). This notice will inform you of the entire amount that is now due in order to avoid foreclosure. It will also inform you of when and where your home will be auctioned or sold. This, my friends, is the official start of the foreclosure process.
- Your mortgage is now 100 days past due. At this stage of the game it is still possible for you to keep your home; however, your options are now becoming limited due to the fact that so much time has gone by. Don't get me wrong, your house is still on the selling block, however, the mortgage company will be happy to call off the sale if you are able to come up with the past due amount. Exactly how much time you have before your home is sold depends on what state you live in. There are two types of foreclosures…nonjudicial (statutory) and judicial. Nonjudicial foreclosures tend to move along a lot faster than judicial. This is because a judicial foreclosure requires the lender to actually sue you in a court of law in order to take your home. Judicial foreclosures can take up to a year because the court process can drag on and on. The good news is that you can delay or stop the foreclosure process (no matter whether it be a judicial or nonjudicial) if you can come up with the cash before the sale of your home.
- After the foreclosure sale. If you are not able to come up with the money necessary to save your home, it will be sold. After it your home is sold the local sheriff or marshal will show up and deliver an eviction notice. The eviction notice will let you know the date in which you, as well as your belongings must be out of the house. In some cases, the lender that holds your mortgage may purchase your home and then higher a realtor to sell it for them.
So there you have it, a basic foreclosure timeline. If you are having difficulties making your mortgage payments, it is very important that you seek advice and help BEFORE the foreclosure process begins. If you KNOW that you are in over your head, you may wish to consider selling your home and downsizing to a more affordable house. After all, the size of the home you live in doesn't really matter…it’s the love of the family that lives inside! Trust me when I say that having a reasonable mortgage (which may mean a smaller house) is much better in the long run. You will be less stressed, therefore, able to enjoy life! Good luck!
If you have a few moments to spare, please read some of my other finance related HUB Pages! Thank you.