Foreclosure Timelines

In an unfortunate economy, many borrowers aren’t able to keep their heads above water, let alone manage a mortgage payment. I have worked with many individuals on the verge of losing their homes to foreclosure, down to the wire on the time line. The sad truth of these situations is that many buyers don’t understand the process, jargon or legal implications of the letters they receive from the bank until it’s too late. If you are behind on your mortgage, or you think you are going to have to miss a payment, this information is what you need to know in order to prepare yourself and stave off a foreclosure proceeding.

30 ‘” 90 days late
On day 31, you will receive a notice from the lender informing you that you are now in default status. This means you are not adhering to the terms of the loan, and this is serious. Most lenders will repeat this notice for up to 90 days of failure to pay before taking the next step.

What you should do: Contact your lender immediately, from the time you are just a few days late on your payment and ask about your options. Don’t be embarrassed or stick your head in the sand like an ostrich. This is the best time to stop foreclosure proceedings from going any further, and optimal conditions for agreeable results.

90 ‘” 120 days late
At this point, things get extremely serious. The lender sends a notice of intent to accelerate the loan via certified mail. This notice informs the borrower that the lender is now calling the total amount of the loan due. In other words, if you are behind on your payments by $3,000 on a $120,000 home, you are now behind $120,000, and that is what the bank wants. The intent to accelerate is the final step before the foreclosure auction.

What you should do: Contact your lender. There is still a chance to work out an plan to pay your arrearage and restore your loan. If the lender isn’t working with you, contact a counselor from the local Department of Housing and Urban Development offices in your area. Things have already gone very far, but it isn’t over yet. There is still hope.

Notice of Foreclosure
About a week to two weeks after you receive the intent to accelerate, you will receive the foreclosure paperwork. This paperwork will not come from your lender; it will come from an lawyer’s office. In this paperwork, you are advised of the upcoming foreclosure auction date, and the bank’s intention to repossess the house.

What you should do now: If you still haven’t contacted your lender, it’s time. If you let it go any further, your right to reinstate your loan expires. You have until the date of the auction to resolve your situation, and at this point, you have no excuse. If you wait any longer, it will be too late.

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