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The Foreclosure Process

How Long Does The Foreclosure Process Take?

A foreclosure is a legal process in which the bank repossesses your home after you’ve defaulted on your payments. Receiving a foreclosure notice, however, does not mean that all is lost. There are still ways you can save your home from foreclosure.

You should immediately contact your lender or a Foreclosure Attorney to discuss ways of preventing the action. The lender may offer you a loan modification or other settlement options in order to avoid foreclosure. Foreclosure Lawyers may be a wise choice if you feel you have a good defense against the notice.

A loan modification changes the terms of your mortgage so that you can afford to keep making payments. Most lenders will not offer this option until you’ve missed several months of payments. 

Keep in mind, however, that you have to take action in a swift manner after receiving a foreclosure notice to avoid getting to the point where the lender issues you an eviction notice.

What Is The Process Of Foreclosure?

Even though the foreclosure process varies from one state to the other, there are usually six phases of the procedure as discussed below: 

Phase 1: Payment Default.

This is the preliminary stage when you have not made your last payment in full. Keep in mind that you are considered to be in default if you miss at least one payment. 

After missing the first payment, you will usually get a grace period after which the lender will charge you a late payment fee. They will also send you a missed payment notice. If you miss the second payment, your lender will send you a demand for payment notice.

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Phase 2: Notice Of Default. 

Once your lender has determined that you are about three to six months behind on your payments, they will record a “notice of default” which is forwarded to the County Recorder’s Office.

You will also receive the notice of default form from the lender. At this point, you will have 90 days to complete the most recent payment and reinstate the mortgage. This period is referred to as the reinstatement period.

Phase 3: Notice Of Trustee’s Sale

If you are unable to catch up on the loan even after the 90 days of reinstatement, the lender will proceed to make a notice of trustee’s sale at the county recorder’s office

In addition to making the notice, the lender will also have to publish a notice in the local newspaper for three weeks consecutively before auctioning the home. At this point, you have up to 5 days to complete your payments entirely to avoid foreclosure.

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Phase 4: Public Auction

Once the 5 days grace period is over, the home will be auctioned off by the lender of their representative. There will be an opening bid for the property which is determined by your balance, unpaid taxes, any liens, and the cost of the sale. 

The property is usually sold to the highest bidder who is then given a trustee’s deed to certify their official ownership of the property. You will typically have three days to move out after this, failure to which the owner is free to start a formal eviction process. 

Phase 5: Real Estate Owned (REO)

If the property fails to sell at the auction, it is taken over by the lender and it becomes an REO property. Real Estate Owned properties are also referred to as “Bank-Owned”. 

As the owner, the lender can then try to sell the property with the assistance of an REO asset manager or through a broker. A majority of the lenders get rid of liens and expenses at this point to make the property more attractive to potential buyers.

As the lender tries to sell the property, they will send a notice to the previous owner asking them to move out. Some lenders often offer “cash for keys” to the previous owner, which is meant to make it easier for the borrower to move. If the previous owner fails to vacate, the lender will then initiate a formal eviction process.

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Phase 6: Eviction 

If the foreclosure process gets to this stage, the previous owner will be sent an eviction notice which means that they are supposed to vacate immediately. A few days might be offered to allow the individual to move.

If the borrower does not vacate the home during the offered period, the local Sheriff is supposed to evict them. Any personal belongings that the borrower cannot carry with them are placed in storage for later retrieval. Your Foreclosure Lawyers will be able to guide you through these steps.

How long is the process of foreclosure?

The amount of time that a foreclosure takes will vary depending on your situation, the state you live in, and the length of the steps that you are taking (if any) to prevent the foreclosure. 

Generally, a foreclosure process can last anywhere from 6 months to about 18 months. 

What are your legal rights in a foreclosure?

You are entitled to various rights by default in a foreclosure situation. The main rights that you ought to know about  and go over with your Foreclosure Lawyers are:

  1. Loss Mitigation Rights

Loss mitigation is simply a process in which you work with the lender to avert foreclosure. The lender is supposed to offer you written mitigation options after 45 days in addition to referring you to a party that will help you prevent the foreclosure. A lender is typically not supposed to initiate foreclosure before 120 days have elapsed since you missed your first payment.

  1. Breach Letter Right

As the borrower, you are entitled to a breach letter from the lender which is supposed to notify you that you are in default. The letter should mention:

Why you are in default

What you can do to get out of the situation

How much time is left to cure your mortgage and reinstate it

That the property will be put up for sale if you are unable to cure  your debt

You are typically supposed to get the breach letter at approximately the 90th day of the delinquency.

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  1. Right To A Notice Of Foreclosure

Regardless of the state that you live in, you are entitled to a notice of foreclosure. It can either be judicial or non-judicial, in which case you will receive a different notice of foreclosure depending on the type of foreclosure. 

If you are not served with a notice of foreclosure, that does not mean that you can avoid the foreclosure. In the best-case scenario, the lender will have to start the foreclosure process from scratch, buying you some time to get your payments right.

  1.  Reinstatement Rights

You also have a right to reinstate your loan, depending on state law. In this case, you would have to make a lump sum payment so that your monthly payments, fees, and expenses are up to date.

There, however, is a limit to this right. You cannot reinstate a mortgage past the set deadline before the property sale. There are some cases where you can move to court to request to be given a chance to reinstate your loan if the right is not provided for in the law of your state.

  1. Right to Redemption

You also have a right to “redeem” the property if you can come up with the amount that is needed to pay off your debt. In a majority of cases, the borrower is expected to redeem their property before the public auction.

However, it is also possible to get the property back after the sale by reimbursing the individual or entity that purchased the property. You might want to keep in mind, all in all, that such occurrences are not that common. 

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  1. Right To Mediation

In some states, you might have the right to engage in mediation depending on the situation. What this basically means is that you will have a meeting between you, your lender, and an impartial mediator. At this meeting, you will try to come up with solutions to solve the problem such as a repayment plan, loan modification, short sale, or deed in lieu of foreclosure.

  1. Right To Challenge The Foreclosure

Regardless of the state that you live in, you are entitled to the ability to challenge the foreclosure in court. If it’s a judicial foreclosure, you only have to participate in the lawsuit. In the event of a non-judicial foreclosure, however, you will have to file a lawsuit. Such action is necessary if you have reasons to believe that the lender made a mistake or took a step that violated the law.

  1. Right To A Surplus

There are cases whereby the property on sale might fetch more than you owe (liens, fees, and expenses included). In such a case, you have a right to the excess proceeds which are professionally referred to as the “surplus”. 

Keep in mind, on the other hand, that you could also be subjected to “deficiency judgment” if the property sale did not cover your debt. As you may expect, this depends on the laws of the state that you live in.

In all these cases be sure to go over them with your Foreclosure Lawyers.

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Disclaimer: This article is meant for educational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.


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