The borrower misses the first mortgage payment
A late charge is assessed on payment.
The company that processes borrower’s payments (called the mortgage servicing company) attempts to make contact to find out what happened.
The borrower is given 30 days to resolve the situation by paying the delinquent ammount
The servicing company refers the loan to its foreclosure department and hires a local attorney or other firm to initiate foreclosure proceedings.
Depending on the state where the home is located, the servicing company representative may record a formal notice of foreclosure at the local courthouse, publish details of the debt in the local newspaper, attend hearings on the case and make appropriate court filings.
The house is sold at foreclosure sale or auction. The wide time range is due to different state requirements.
Borrowers in states with judicial foreclosures, or those which lenders have to retake property via the court system, can get almost a year to straighten out their affairs before the sale. Those in non-judicial states have as little as two months.
After the sale, some states grant borrowers a “redemption period” in which they can still repurchase the property if they have the money.
This general information is provided for counseling purposes only. It is not to be taken as legal advice. Application to your specific situation may vary, so please do not hesitate to contact us if you have any questions.