Though foreclosure timelines vary from state to state, some general rules apply for judicial foreclosures, which are processed through each individual state’s court system. One way to avoid a foreclosure is to discuss a short sale with your mortgage holder or bank, meaning if you anticipate being unable to meet your mortgage payments, your bank may allow you to sell your property for less than the remaining mortgage.
First Missed Payment (Day 1-30)
Following your first missed monthly mortgage payment, the mortgage holder, in most cases a bank, will contact you to let you know that your payment is late and to ask when the payment will be made.
Second Missed Payment (Day 60)
A second missed payment will result in collection calls and possibly a request for the payment to be made over the phone with a credit card or check.
Third Missed Payment (Day 90)
After failing to make a third or fourth payment, the mortgage holder will issue a breach letter, also known as a demand letter or notice of acceleration, to inform you that you have 30 days to settle your outstanding debt. If you are unable to make the overdue mortgage payments, the loan will be accelerated, meaning you will be asked to pay the total balance of the mortgage, not just the outstanding payments. Following this notification, the judicial foreclosure process may begin.
In order to avoid judicial foreclosure, the past due amounts must be paid within 30 days of receiving the notification letter. Partial payments will usually be rejected.
Fourth Missed Payment (Day 120)
After a fourth missed payment, the mortgage holder will usually enlist an attorney to begin the foreclosure process.
Judicial Foreclosure (Day 150)
Once the foreclosure attorney receives your file, they will proceed to file a foreclosure complaint with your designated county court. The claim will request a judgement that authorizes the sale of the property to settle the outstanding debt. In the meantime, you will be served with a summons, as well as the foreclosure complaint. At this point, you will want to consider seeking legal representation to defend yourself against the foreclosure process. Given that an attorney will need time to prepare your defense, it is best to contact a lawyer as soon as possible.
Once you have received the summons and complaint, you will usually have 20 to 30 days to respond. Though you are not legally obligated to file an answer with the court, failure to do so will result in a default judgement, which will allow the mortgage holder to pursue a foreclosure sale.
If you do seek legal representation and file a substantive response against the foreclosure, the process may be delayed. However, without a defense, a default judgement will be issued and the mortgage holder will be authorized to sell the property.
Foreclosure Sale (Day 196)
After a judgement of foreclosure has been entered by the court, a notice of sale, detailing the time and date of the foreclosure auction, will be posted. The mortgage holder may bid the total amount of the debt, as well as the foreclosure fees and costs, while other parties are free to make a cash bid. The foreclosed property will go to the highest bidder.
Some states allow for a redemption period during which the debtor can attempt to buy back or redeem their property. During this period, you may be allowed to remain in the home.
In most cases, the court must review and authorize the foreclosure sale following the auction. Once approved, the new owner will be issued the deed to the property and the foreclosure process will be finalized. Residents who have chosen to remain in the home during the redemption period will then be evicted.
The judicial foreclosure process can take months or years to complete, therefore, if you anticipate a resolution in your favor, it is best to seek legal counsel to delay foreclosure proceedings.
Below you will find a sample of a foreclosure letter issued by the mortgage holder.