Process of Mobile Home Foreclosure

Introduction

Mobile home foreclosure is similar to any other home foreclosure. The steps taken in the process can vary from state to state, but the process usually unfolds rapidly so the lender can regain her property.

Foreclosure Time Line

Owners need to be aware of the timeline for foreclosure. An owner or borrower can miss the first payment by a day without penalties. After about 16 days, a late charge is added to the payment. This is because most financial institutions have a grace period on payments. This grace periods on those payments are usually about 15 days. At that time, the lender, or bank, will try to make contact with the borrower to find out why the payment is late.

Late Payments

Between 45 to 60 days of being late with a payment, the lender will send a letter to the borrower. This letter is called a demand or breach letter. The letter will state the contract breach to the borrower and will inform the borrower they have 30 days to resolve the delinquent amount. During this time, the lender will also make calls to the borrower in hopes of settling the matter. The number of collection calls can be regulated from state to state. As long as the lender does not use foul language or threaten a borrower, it is legal in most states to make several phone calls a day. The time of day can also be regulated from state to state.
After about 90 days after the missed payment, the lender will usually turn the loan over to its foreclosure department, or loss mitigation department. Also, the lender will seek an attorney or law firm to handle the foreclosure proceedings. Some states also allow the lender's representative to publish a notice of default in the local newspaper and courthouse.

Foreclosure Proceedings

The foreclosure proceeding continues well through day 150. During this time and up until day 415, a notice of trustee sale is filed and the home is put up in a foreclosure auction or foreclosure sale. This can take place on the property of the home or "by public outcry" on the steps of the local courthouse. Again, the timeline of foreclosure can vary from state to state. Some states require lenders, or their legal representatives, to undergo a judicial foreclosure. The courts can extend the timeline of the proceedings to give the borrower more time to pay the delinquent amount to the lender.

Foreclosure Auction

The lender, generally, would rather negotiate with the buyer to make arrangements for payment of the balance of the loan. The lender might not make as much with an auction or sale as they can if they make new arrangements with the existing borrower. It is in the lender's best interest to limit liability and keep all costs associated with the legal process to a minimum.