How long does foreclosure take?
One of the most important things to know if you are behind on your payments is how long does foreclosure take. The timeline for foreclosure will depend heavily on your state foreclosure laws. If you think you might be in danger of missing a payment, it is important to know as much about it as you can. Usually the state will require the lender to send you notices in the mail. In general, the foreclosure process takes between three and six months.
There are essentially two different types of foreclosures. The first is judicial foreclosure and the second is nonjudicial. States with judicial foreclosure tend to take one to two months longer to go through the complete foreclosure process. States with judicial foreclosure have been known to take over 250 days, or 8.5 months to finalize a foreclosure. States that have a nonjudicial foreclosure can usually complete the foreclosure process in 3 to 6 months.
If you have a payment that is due on 1 September, most mortgages companies will give you a 15 day grace period. This means that your payment has to be in by September 15 or you will be charged with a late fee. A lot of companies will actually start calling you between the first and the 15th to make sure that you are still planning on sending your payment. Make sure that you talk to them in advance, especially if you think you might be late.
If you haven’t paid your mortgage by the second of November, you are more than 60 days late. This is when your loan is going to be considered as being in default. At this point in time if you want to bring your loan current, you will have to pay the amount of money owed plus interest and penalties.
One good thing to note is that you can get some flexibility from most lenders at this point. They do not want the foreclosure to go through, and so you might be able to work out a deal that will allow you to get caught up on your payments and not have to go through foreclosure.
The way most loans are written, the lender is allowed to start the foreclosure process if payments are more than 60 days late. The lenders don’t really want to foreclose on your home because it means they’re going to lose money. Most of the time they’ll give you a little bit of extra time to get caught up and ready to pay rent.
A good way to keep from going into foreclosure is to keep in close contact with your bank or lender. Often they will work out a repayment plan for you. If you can get caught up with the payments, including fees and interest, then this is a good option. It can also postpone the foreclosure filing for a few months.
If the lines of communication are open, and the person borrowing the money keeps their commitments to repaint the amount that is owed, then foreclosure is nearly always avoidable. Don’t treat your bank like the collection agents for a credit card company. By ignoring them, if you will probably make the foreclosure process happen even faster.
How Long Does Foreclosure Take with a Judicial Foreclosure
With a judicial foreclosure, you will be served a complaint notice if you are more than 60 to 90 days late. Also, hearing will be scheduled at this time. At the hearing, the judge will decide whether or not the foreclosure can proceed. Also, you’ll typically be given a redemption date by which to bring your payments current. Redemptions don’t typically happen because in order to regain the property once it has been foreclosed on you have to come up with all of the amount owed. Not all states allow a redemption.
How Long Does Foreclosure Take with a Nonjudicial Foreclosure
A nonjudicial foreclosure doesn’t require going to court. You basically get a notice of default in the mail. And the lender will also send you a date at which your home will be sold at auction. More and more lenders are switching over to nonjudicial foreclosures, because it makes it easier for the foreclosure process to happen.
An interesting fact is that most of the time, when your home is sold at a foreclosure sale, the owner of the first mortgage will bid on and win your home. The first mortgage holder will likely want to go to the auction just to make sure they don’t lose a lot on the sale. Most of the time they will bid the amount owed on the force first mortgage +1 dollar. In the worst-case scenario, after the sale of your home, you receive a notice of eviction from a sheriff which will give you 24 to 48 hours to vacate.
The advantage of understanding how long the foreclosure process takes is that it makes it easier for people being foreclosed on to plan out their lives. For instance, they know that they’re going to have three months before their house gets foreclosed on, and then another 30 days to move out, they can typically start saving money, and that way they’ll have enough for a deposit and first months rent when they move into another house. The more you understand about foreclosures and how they worked in your state, that better you will be able to handle this unfortunate situation if and when it arises.
Going through foreclosure can be heart-wrenching and very difficult. If you are in a position to do so, you should try and take control of the process. See if you can work an extra job until you are able to make up on your late payments. If you’re out of work, try and find work immediately. Most of the time by finding work right away, you can prevent foreclosure from happening.