Stages Of Foreclosure
Many people think of foreclosure as an acute event, such as an eviction or auction. But foreclosure is actually a series of legally-sanctioned steps
that unfold over time. Because it can lead to the loss of your home, its important to understand the timing of each phase of the process.
Every state in the U.S. has its own particular set of laws regarding foreclosure. To know exactly how it all works where you live, youll need to check the local statutes. Meanwhile, this timeline will give you a general overview
to help put the process into perspective.
SEE ALSO: Short Sale Vs Foreclosure: Which Is A Better Buy?
Your mortgage payment due date arrives, but you fail to make the payment. This causes the foreclosure clock to start ticking. After your payment is at least 15 days past due, youll likely be charged a late fee
, and your mortgage company, or its mortgage service company, may try to contact you concerning the matter.
Second Monthly Payment Missed
After you miss your second monthly payment, the lender will try to contact you to discuss the problem
. Avoiding their calls can only make matters worse. But, at this early stage, you may be able to catch up on missed payments, and resolve the issue before it gets really serious.
Third Monthly Payment Missed
The mortgage company will send a notification to you, explaining that you have failed to meet the terms of your agreement. Youll then have 30 days to solve the problem
by making your missed payment or payments, including whatever late fees and penalties have been added.
Fourth Monthly Payment Missed
If the situation has not been resolved, the mortgage company will refer your case to a foreclosure attorney
, who will initiate official foreclosure proceedings. The lawyer will usually post a formal notice of foreclosure at the courthouse and in the newspaper, according to the laws in your state. Youll be charged legal fees related to these actions.
After Month Four
The home will be scheduled for sale by the mortgage company
, at a public foreclosure auction. The exact timeline depends upon the laws in your state.
Depending on your state laws, you may be evicted right away, or given a short period of time to come up with the money and repurchase the foreclosed home.
SEE ALSO: 4 Programs That Will Help Stop Your Foreclosure
Talk To Your Lender
When homeowners default on their payments, the tendency is to avoid talking to the lender. Although that may be a natural reaction, its the wrong course of action for anyone who hopes to avoid the pending foreclosure.
Should you find yourself behind on a payment, make every effort to speak to your mortgage company as soon as possible
. Open dialogue is the key to finding a solution. But the longer you postpone talking to the lender, the more time is lost that could be used to help save your home.