Helping Foreclosures

Educating Yourself In The Steps Of Foreclosure
By Brenne Meirowitz
If you are a homeowner, it may be wise to give yourself a brief education in the steps of foreclosure, whether you are in financial trouble now or not. If you are not, you may know someone who is, and therefore with a basic amount of knowledge gained in this article, you may be able to help that person. While I don’t claim to be an expert in real estate, nor am I an attorney, I do have over ten years of experience working in the real estate and mortgage banking field. Unfortunately, I been involved with both buyers and sellers of foreclosures, negotiated sales of foreclosed properties, and counseled owners in the pre-foreclosure process.

Please keep in mind that the following is only an overview in the steps of foreclosure, as laws and procedures vary from state to state, including the timeline from the first notice of sale to the actual date of eviction. Additionally, because lender foreclosure procedures and policies vary, it is advised that you contact your lender or loan servicer even before your first payment is late or missed, particularly if you anticipate having long-term difficulties keeping up with your regular payments. Your lender employs credit counselors who may be able to reduce your payments temporarily or even renegotiate your mortgage to better suit your situation. The key is to contact them before you miss your first payment.

Also, as laws vary from state to state, you would do well to research and know your homeowner rights on a foreclosure.

First 30 Days:

Your lender or loan servicer will contact you by mail alerting you to the fact that your payment has not been received. Generally, a lender will not call before a full month has passed. Being late, or missing a single payment does not automatically trigger a foreclosure ticket. Situational circumstances do occur, such as a mail delay, lost coupon, or clerk error, and can usually be resolved quite smoothly. Once such an issue has been addressed and your payment as well as any late fees and penalties have been satisfied, you are no longer at risk of foreclosure. However, be aware that lenders usually will report to credit bureaus if your payment is received 30 days after the due date.

60 Days:

If your lender has not received your mortgage payment as well as any late fees and penalties beyond 30 days from the due date, but less than 60 days, they may step-up their collection efforts with at least one phone call, as well as send you a warning letter. If you have already missed a second payment and are 60 days or more behind in your mortgage payment, lenders will generally accelerate their collection efforts. At this point, your delinquency will probably be registered with at least one if not all three of the major credit bureaus.

90 Days:

Collection efforts are stepped-up by your lender or loan servicer. In addition to phone calls, a “Demand Letter” or “Notice to Accelerate” will be mailed, warning that foreclosure proceedings may begin if you do not bring your mortgage current within 30 days. In essence, the “Demand Letter” or “Notice to Accelerate” means that the lender can call the entire mortgage due and payable if you do not bring your loan current within 30 days. Partial payments without a pre-arranged written agreement with your lender or loan servicer will most likely not deter foreclosure proceedings. Therefore, as noted earlier, it is best to try to renegotiate your loan prior to missing any payments.

120 Days:

Your lender’s attorney will contact you. At this point, you are held financially responsible for the lender’s legal costs in addition to your loan balance, fees, and penalties. Even if you bring your mortgage current, you must still pay legal and court costs incurred by your lender or loan servicer.

120 + Days:

Your lender’s attorney will file a foreclosure hearing, specifying a sale date in court. Once the notice of sale is filed, you will be notified by mail or with a notice taped to your door advising you of the exact day of foreclosure and subsequent sale of your home. Depending upon the laws of your state and court calendar, a Sheriff’s or Public Trustee’s Sale can take place as soon as 2-3 months after the “Demand Letter” or “Notice to Accelerate” is filed and a foreclosure date is set. If you cannot bring your mortgage current, pay all incurred attorney fees, court costs, interest, and penalties, your lender then has the right to take legal possession of your home.

Post Sale:

Depending upon the legal steps of foreclosure in place in your state, even after your home is foreclosed, you may enter into what is called a redemption period, which will again allow you the opportunity to pay all monies due within a specified period of time prior to being evicted from your home. The redemption period is specified on the same notice advising you of the scheduled Sheriff’s or Public Trustee’s Sale.