General Foreclosure Process

Banks can start the foreclosure process as soon as one month after you fall behind on your mortgage.

While details of the foreclosure process vary by state, the basics remain the same no matter where you live. It can start as soon as you fall even one month behind on your mortgage payment, although you can stop it at any point until the bank sells your home.

Past-Due Payments

The first step in a foreclosure is a letter or phone call from the bank informing you that you are behind on your mortgage payment and you should send the amount due on your loan as soon as possible. These letters generally start when homeowners are about a month behind on their mortgage payments and can continue for about three months without the bank taking more aggressive steps. Generally, you can pay off your past due amount at any time during this period without facing any consequences from the bank besides a note on your credit statement that you missed mortgage payments.

Bank Notice

Once you are about 60 days past due, your bank will send what's called a notice to accelerate. This is a warning that you must pay the entire overdue amount on your mortgage, plus any interest and fees, or else the bank will move up the due date of the entire remaining principal on your loan and formally start to foreclose. If you still take no action, the lender will hire an attorney and send you a legal notice that you must pay immediately or else the lender will make the first court filings required to start the foreclosure proceedings. This letter is called a demand letter.

Court Notice

At this point, the lender will file a formal notice with the court that you are behind, or in default, on your loan. This letter, called the notice of default, will itemize the entire amount you have to pay to keep your home. By this point, you will be required to pay all the lender's attorneys fees in addition to any late fees and interest due on your loan. This is the time to consult one of the many non-profit or government-sponsored counseling services about your options if you want to keep your home.

Sheriff's Auction

If you still can't pay the loan or negotiate a repayment plan with the lender, the lender will send a notice of sale -- or simply post it on your door -- telling you what date your home is scheduled for a sheriff's auction or trustee's sale. The grace period you will have before the sale goes through varies depending on your state, but it is generally about two to three months. The day the home is sold is called the official day of foreclosure, and it is the deadline for you to move out of your house.

References

• RealtyTrac: Foreclosure Overview and Foreclosure Process
• Foreclosureprocess.org: Stop the Foreclosure Process
• Foreclosure Process Information: How the Foreclosure Process Works