HOW THE PROCESS WORKS – A FORECLOSURE TIMELINE

Most mortgage payments are due on the first of the month, but lenders normally allow a ‘grace period’ of 10 to 15 days in which you can pay and still be have the payment considered on time.

Day 16 – Payment is Late

On the day following expiration of your grace period, your payment is late. Most lenders won’t be concerned yet, because they’re used to people going through minor shortfalls. At this point, they’ll charge a late fee and send a reminder letter. They may begin phoning. A payment sent now, although late, is not a big deal and probably won’t even show up on your credit report.

Day 31 – Things Get Serious

Your mortgage is now in default. A second notice is sent and your credit rating is affected. Phone calls become more frequent and insistent.

Day 45-60 – Turning up the Heat

Your lender sends you a ‘demand’ letter pointing out the terms of your mortgage contract and that you are in violation of those terms. Lender makes it clear that foreclosure is in your future.

Day 61-90 – Acceleration – Bad News Coming Faster

Your lender starts the ‘acceleration’ process. They send you a letter informing you that they will foreclose on your property unless you pay your entire current and past due balances – plus all penalties and late fees.

At this stage, your lender will probably refuse to accept partial payments and could even ‘call the loan’ – demanding that you pay the entire balance.

Day 91-105 – Calling in the Lawyers

Your lender now refers your mortgage to their foreclosure department and begins legal proceedings. This process varies from state to state, but in all cases, the lender’s legal fees now become a big part of the price you’ll have to pay to again get current with your mortgage.

Day 106-180 – Your Home is Sold!

Your house is auctioned off at a foreclosure sale.

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