Foreclosure Process by State
When a foreclosure notice from your mortgage lender shows up in your mailbox, panic is a natural first reaction. In fact, depending on where you live, you may still have time and options.
The foreclosure process varies from state to state, but some general rules apply in most parts of the country. Some of these laws give you a chance to keep your home.
Understanding the Foreclosure Process
The foreclosure process usually doesn't begin as soon as you miss your first payment. It can take from three to six months for your lender to begin taking steps to foreclose, depending on your state. A missed payment generally has to be a month late before you've defaulted on your mortgage contract. At this point, your lender can begin taking action. Most lenders, however, will contact you first and try to work something out.
Foreclosure Won't Happen Without Notice
If you can't work out a solution with your lender, you'll receive a foreclosure notice. What kind of notice you receive will depend on your state's foreclosure laws. It might be a letter that warns you have a certain amount of time – usually 30 days – to catch up your payments before your lender officially begins the foreclosure process.
Some states require your lender to take you to court first, so you might receive a foreclosure lawsuit. The court date will usually be about a month later, so you still have time to make arrangements to catch up with your payments.
You Have Some Options
If your lender sues you and wins the lawsuit, the mortgage company can proceed with scheduling the sale of your home. Even if no lawsuit occurs, you'll probably receive notice of the scheduled sale of your home. Generally, the sale is an auction.
Either the sheriff or the mortgage company will hold the sale. At this point, you can usually participate as a bidder. If you win the auction, your existing mortgage loan usually contributes toward the purchase price. You'll only have to come up with your past-due payments and cover your lender's costs for the auction.
When Must You Move Out?
If someone else buys your home at the auction, you&'ll receive notice that you have to move out. How long you have depends on your lender. You might have to move out immediately after the auction. However, your lender often has to work with the sheriff in your county to officially evict you. Some lenders even offer you a grace period after the sale to buy back your home.
A Foreclosure Lawyer Can Help
The law surrounding foreclosures of residential property is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a foreclosure lawyer.