Foreclosure – How Long Before I Lose My House?

Many homeowners have questions about how foreclosure works and how long they have between when they miss a payment and when the bank actually forecloses. If you’re wondering how long you have before you have to leave, it depends on whether your case will be handled in a judicial foreclosure or in a non-judicial foreclosure. Most states allow both, but some states only allow one or the other, so you’ll have to research to find out which your is for sure, but there’s a good chance yours will be non-judicial because it moves faster and costs less for the lender.

All Foreclosures

– You miss your first payment (for example, we’ll say this is your July payment and it was due on July 1).

– Your grace period expires (usually 15 days) and you haven’t paid. Your payment is now considered late by your lender. It’s not uncommon to begin getting letters or phone calls from them at this point. Don’t ignore these phone calls.

– At most lenders, once you’re 60 days late (September 2 in our case), your loan is considered in default and the lender can begin either the Judicial or Non-Judicial foreclosure process. To bring your loan current at this point, you’ll usually be required to pay all past due amounts (your July and August payments), all late fees, and your September payment.

This is where lenders have the most flexibility in the process. They aren’t required to enter the foreclosure process simply because you’ve fallen a certain number of days behind. If you’re in communication with them and have worked out a plan to get back current, you can stay out of foreclosure altogether, but you have to take action.

Judicial Foreclosures

– Your lender’s lawyer will file a complaint with your county courthouse and request a court date. This typically doesn’t happen until you’re over 90 days late.

– You’ll be served a notice of this complaint.

– A hearing will be held in your county to determine the sufficiency of the complaint. If you believe you have legal grounds to dispute the foreclosure, this is where you and your lawyer would argue those grounds. At the end of this hearing, the judge will rule whether the complaint is sufficient or not. If it is, the foreclosure sale will be scheduled and your credit record will be marked as having a foreclosure. If it’s not sufficient, the judge will dismiss it. How long all of this takes is dependent upon the courts in your area. Typically, it takes about 30 – 60 days.

– A date will be set for redemption of the property if your state laws stipulate. You can still bring your loan current (including fees, etc) until the redemption date. Even if the house has been sold and someone has moved in, if the redemption date hasn’t passed, you can still get your house back…if you can get enough money.

– A date will be set for the foreclosure auction. This usually happens about 30 – 45 days after the sufficiency hearing.

*** A Judicial foreclosure typically takes anywhere from 6 months to 2 years from start to finish. ***

Non-Judicial Foreclosures

– Your lender will send you a Notice of Default in the mail.

– Your lender will send you a Notice of Sale to tell you when your home will be sold at the foreclosure auction.

*** A Non-Judicial foreclosure typically takes anywhere from 1 month to 1 year to complete. ***

All Foreclosures

– The foreclosure sale happens and your house is sold. In approximately 90 – 95% of cases, the owner of your first mortgage wins the auction because they bid the amount that you owe on that loan and usually no one else will go higher than that.

The owner of your home then contacts the county sheriff who posts a notice of eviction on your door. This notice gives you 24 – 72 hours to leave the house and have all of your possessions out. If you’re there when the sheriff returns, he will escort of off the premises and anything left on or in the property will then belong to the new homeowner.

How Long After Foreclosure Until Eviction?

In many cases, homeowners, for one reason or another, are unable to save their homes or find a solution that will stop foreclosure. Unfortunately, many simply wait until the last minute, hoping against hope for a mortgage broker who will come through with a new foreclosure loan, only to be left hanging at the end with nothing besides a rejection. In such cases, lenders may be unwilling to continue to postpone a sheriff sale, and the foreclosure victims will find that they must find a new place to live. How long the eviction takes, though, and the state foreclosure laws will determine what a homeowners next steps should be in planning their lives after foreclosure.

In general, the bank will not start the foreclosure process until the homeowners are 3-6 months behind on payments. They can start as soon as you the loan is in default (31 days late), but most lenders will give their clients the time to get caught up and give them the benefit of the doubt, rather than starting foreclosure right away. Mortgage companies know that some people just have a one-month or short-term financial hardship that causes them to fall behind for a short period, but are then able to recover quickly and begin paying the mortgage on time again and avoid foreclosure completely.

Also, if the homeowners are working with the bank for a repayment plan or mortgage modification, they the lender will be much more willing to postpone the foreclosure filing for a few extra months. Once foreclosure starts, costs go way up, so they may be willing to get the homeowners qualified for a workout program before the situation gets out of control. Even without the actual filing of the foreclosure lawsuit, though, late fees and interest will begin to accumulate, so it is in the best interests of the homeowners to begin saving as much money as possible once they fall behind, as well as contact the lender for options to stop foreclosure.

The time period for the actual foreclosure process will vary from state to state, once the paperwork is filed. The house will be sold at sheriff sale, and then the redemption period begins, if one is offered in the state in which the property is located. For example, some states have no redemption period, while others have a one-year redemption period under the state’s foreclosure laws in order for the homeowners to stay in the property and look for some way to save it. Refinancing, selling, or paying the redemption amount in full can all be done while the foreclosure victims continue to live in the property for the length of the redemption period.

After the end of redemption, though, the eviction process will start. Eviction can usually take 2-4 weeks, depending on how quickly the lender starts the process and how quickly the sheriff can come out to the property and conduct the actual physical eviction. Once that happens, though, the homeowners will be set out on the street and the locks will be changed. It will be better to be out by this point than be evicted, of course, but it is also better to find a solution before the situation reaches this point, as well.

Time periods for foreclosure and the eviction process vary wildly from state to state. Some even have the redemption period before the sheriff sale, while most others have a redemption period after the sale. This is why is important for homeowners to gain the foreclosure information necessary to understand how foreclosure works, and how much time they will have to put together a plan designed to stop foreclosure. One of the best places to start researching is the state foreclosure laws, and the best time to start researching is as soon as possible. Waiting too long to learn how foreclosure works and then not putting together a plan to save the home is almost a sure-fire way to end up homeless and evicted.