Can you explain the foreclosure process?

The Foreclosure process follows a designated path. It only detours slightly depending on each State’s individual Foreclosure laws. Here is a breakdown of what you might expect to happen and the time frame for Foreclosure.

Miss first Payment (0 -30 days past due):

The process begins with you missing your first payment. Most Mortgage Companies will give you a 15 day grace period without any penalty. After that they will add a late fee to the amount that is due. You may be able to negotiate with them to take the payment without the late fee to bring the loan current. They typically will not begin to bombard you with telephone calls until you become 30 days delinquent.

Miss Second Payment (30 – 60 days past due):

When you miss the second payment some things change. They will usually at this point only accept both months’ missed payments and will not accept any partial payments to bring the loan current. This will also include any late fees they have tacked on. The collection phone calls will begin to increase. They will sometimes call daily if you do not respond to them.

Miss Third Payment (90 days past due):

Typically when you reach 90 days past due the Foreclosure process will begin. They will hire an attorney to start the Foreclosure with the Courts. You should receive a demand letter from them stating that if you do not bring the loan current by a certain day they will file foreclosure. The phone calls will continue from them at an annoying pace.

90 – 120 days past due:

You should receive a letter from the Court system. The Mortgage Company will have filed a Law Suite demanding payment because of default and they will request a Judgment against you. You will have 30 days to answer the appearance or a Judgment will be entered. You can request a 30 day extension to file an answer. We have a sample document you can file to request this extension.

120-360 days past due:

Once the Judgment has been entered the Mortgage Company will immediately file a request to sell the property at auction with the Court at a Sheriffs sale. This is where it gets tricky… depending on your state’s Foreclosure laws. In Texas they will sell the property the first Tuesday of the month following the Judgment being entered. In most other states, the Sale date will be approximately 30-90 days after the Judgment. This is where the home is sold to the highest bidder. Typically the home will be purchased back by the Mortgage Company during the Sheriffs sale unless there is a lot of equity in the home. In that case there may be a lot of people interested in purchasing it. Once the sale has taken place you will need to move out of the house. A Sherriff will serve you with an eviction notice. The timing of this will also depend on your State’s laws. This can be 1 day to 12 months after the sale. Some State’s offer what is called a redemption period after the sale. During this time you can purchase the property back from the highest bidder for a fee added to the purchase price.

What can you do?

At anytime during the process right up until the day before the Sherriff sale you can remedy the situation with your Mortgage Company which will allow you to reinstate the loan. What it will require to reinstate will depend on a lot of things. American Foreclosure Specialists will negotiate with the Mortgage Company on your behalf. They will arrange a settlement to allow you to resume your normal payments and stop the Foreclosure process. Contact them today to arrange a free consultation to see how they can help cure your Mortgage issues.