How Long Does Foreclosure Take?

April 21, 2009 by  
Filed under Foreclosures

Help with Foreclosure – Keep Your Home!

The threat of losing your home to bank foreclosure can be very stressful, especially if you’ve fallen behind due to unforeseen and unavoidable circumstances. Losing a job or suffering from severe illness and injury can greatly impact your ability to stay current on your mortgage and other obligations, and you’re probably starting to feel some pressure from the collectors.

However, there is some good news. Foreclosure doesn’t happen overnight, as lenders are required to give you every opportunity to make good on your promises and become current on your loan. Every state and locale is different, and may allow anywhere from 30 to 300 days for a foreclosure auction to take place after filing an official Notice of Default. Make sure you are familiar with your state’s laws regarding these actions, and that your lender abides by them.

Redemption Periods are available in approximately half of the United States, which allows you to re-purchase your home for the foreclosure auction price. You could be afforded up to a year to use this concession, which is often more than long enough to find a new job and get back on your feet.

Contacting your lender as soon as possible after experiencing an event that directly affects your ability to pay them will far increase your chances for avoiding the foreclosure process. Payment arrangements may be made if your lender understands that your current situation is not due to you simply refusing to pay what you owe.

Other than individual state laws that can deviate somewhat from one another, the general foreclosure process goes something like this:

1. When you first miss a payment, usually due on the first of the month, this is considered the Date of Default.

2. Within a couple of weeks, you will most likely receive a letter and/or phone call from your lender, inquiring as to why you missed your payment. An option may be presented at this time by your lender to attempt to bring your loan current.

3. A Breach Letter will follow within a few weeks that will outline how and why the terms of your mortgage were violated or broken. Homeowners will then have 30 days from the date of this letter to bring the loan current, or risk facing home foreclosure.

4. Approximately 90 days after the Date of Default, your mortgage will be referred to a foreclosure department and local attorney who will file a legal and formal notice of foreclosure proceedings. Your mortgage default will now be a matter of public record, and most likely reported in the local newspaper.

When the process has reached this stage, it is far more difficult to reach a mutual agreement with your lender. However, foreclosure is imminent at this point, and it’s vital to take action to prevent being evicted from your home.

5. If you do not remedy the situation within a specified time period (this could be a week to a year, depending on your state’s laws regarding the matter), your home will be sold at a foreclosure auction, typically in a public arena.

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