Mortgage Foreclosure Process

In our previous article, we talked about what the mortgage foreclosure process is and what steps the bank or lender take to recover the money owed from the property. We’ll now cover the different ways the lenders will proceed regarding a mortgage foreclosure. Depending on the state you reside in, lenders will have their guidelines regarding the foreclosure process and how many payments a homeowner can miss before a Notice of Default (NOD) is filed. Here are some potential correspondences you might receive when you miss one or more mortgage payments ruining the possibility to stop home foreclosure and mortgage foreclosures

In general :

Missed Payment - this is usually the mortgage payment that is typically due on the first of every month. You, however, do have until the middle of the month (usually the 15th) to remit payment, otherwise a late fee is assessed.

Letter of Demand - this is sent to homeowners after 2 missed payments (about 60 days). The lender, at this point, is willing to work with the homeowner given they can remit payment in the next 30 days to avoid foreclosure.

Notice of Default (NOD) - this correspondence is sent after 90 days of missed payments. At this point, your loan is sent over to the foreclosure department of your lender and the county, where the property is located, is notified and the NOD is recorded there. The homeowner will then receive a NOD letter about 10 days afterwards. You are then given 90 additional days to remit payment for the delinquent charges.

Notice of Trustee’s Sale - If you haven’t sent in payment for the delinquent charges, a notice of trustee’s sale will then be recorded with the county and the lender begins the process to sell your property within 21 days. The homeowner will also receive a copy of this letter as reference.

Trustee’s Sale (Sheriff’s Sale) - At this point, the property has been advertised for about 21 days as a notice of sale and the property is sold at an auction.

REO - If for whatever reason, the property is not sold at the auction, then the bank gets an REO (Real-Estate Owned) Broker involved to list the property for the general public.

Eviction from Property - Up until now, the homeowner has stayed in the property but once the property has been sold, the homeowners will then be evicted and will mark the last step of the mortgage foreclosure process.

We have covered some of the general steps involved in the mortgage foreclosure process from the lender’s perspective. Now these steps can vary a little bit depending on the state the property is located. We’d like for you to be abreast of all of the steps to get a clear idea of the timeframe involved from when the process begins until the eviction process to allow you to figure out a game plan to potentially stop mortgage foreclosure from happening..