Foreclosure Process | Mortgage Foreclosure Processes

Most banks and lenders will not start the proceedings until you are 30-60 days behind on your payments by that time someone from the lender has probably contacted you. Many lenders will only accept payment to bring the mortgage current and they would most likely refuse any partial payments.

Once you fall 90 days behind the lender will typically get the ball rolling in one of two ways judicial sale or a power of sale: here are the highlights of both

Judicial sale:
The mortgage lender will file a suit with the courts.

You will receive a letter from the court requesting payment.

You will have 30 days to respond with payment to avoid foreclosure

At the end of the payment period, a judgment will be entered and the lender can request the sale of the property by auction.

The auction is carried out by the county sheriff, typically several months after the judgment.

Once the property is sold you will be served with an eviction notice by the county sheriff and you must vacate the house immediately.

Power of Sale
The mortgage lender will serve you with papers demanding payment.

After a waiting period, a deed of trust is drawn up that temporarily conveys the property to a trustee (typically an attorney)

The trustee will sell the house at a public auction for the lender

A lot of the time foreclosures are subjected to judicial review to make sure that everything was carried out legally.

There are usually requirements for the lender to post a public notice of sale for the auction.

Both types of foreclosures require that any other parties that are tied to the real estate be notified of the proceedings. For example if you had a second mortgage on the property the second mortgage holder would be notified of the proceedings.

Deficiency judgments can also be made against the borrower if the auction does not satisfy the amount of the loan. This can be the difference between loan amount minus the sold price.