The Response to a Foreclosure Notice
Your response to a foreclosure notice should be immediate. You may lose your home if you fail to respond to phone calls and notices from your lender, and wait too long to take action. Ideally, you should notify the lender promptly when you know you will be unable to make your mortgage payments. Prompt action will open up more options for you.
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Judicial/Nonjudicial
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A foreclosure takes one of two forms -- judicial or nonjudicial -- depending on the state in which you reside. In a judicial foreclosure state, the lender must file a lawsuit and go through the court system to foreclose on your property. In a nonjudicial foreclosure state, the lender does not have to go through the court system but can initiate proceedings independently. With either type of foreclosure, typically the lender waits until you are more than 90 days delinquent on your mortgage payments before starting the process with a foreclosure notice.
Notice of Default
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After you are more than 90 days delinquent, the lender will send you a Notice of Default (NOD), which is the official notification to you of the lender's intent to foreclose. If you neglect to respond to the NOD immediately (30 to 60 days in some cases) or fail to cure the default, the lender will move forward with formal foreclosure proceedings. Essentially, you have two methods for response to a foreclosure notice: cure the default through payment of the past due amount, late fees and penalties, or get in touch with your lender without delay to discuss your alternatives.
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Nonjudicial Foreclosure Response
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Since nonjudicial foreclosures do not require court involvement, your only choice for response to a foreclosure notice is to negotiate with your lender, perhaps through a hardship letter. Generally, if you do not respond within 90 days after the NOD has been filed, the Notice of Sale or Notice of Trustee's Sale is prepared and mailed for publication. The Notice of Sale must be visibly posted on your property, a copy must be mailed to you and it must be published in the local county newspaper. If you still neglect to respond, your property will be sold at auction after the appropriate period of time has passed, according to your state's statutes.
Judicial Foreclosure Response
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In a judicial foreclosure, you still have the option of negotiating with your lender, but you also have the choice of pleading your case to the court. Typically, you will receive an NOD or Notice of Intention to Foreclose after you are at least 90 days behind on your payments. If you do not bring the loan current within 30 days, the lender (plaintiff) files a foreclosure complaint against you (defendant) with the court, after which a Summons and Complaint is hand-delivered to you. Typically, you have 20 days to formulate and deliver your response to a foreclosure notice in the judicial process. You will file an Answer to the Complaint, explaining to the court why the foreclosure should not proceed or asking for more time to work with your lender to remedy the default.
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