The Foreclosure Process

The following information is a breakdown of the foreclosure process.  Each state has specific laws that reflect different processes.  

Pre-foreclosure Stage

Once you have fallen a few months behind, you will receive a Notice to Accelerate letter.  After receiving the letter, you will need to pay the past due amount plus the assessed late fees and per diem (daily interest).  You may receive a letter stating they have accelerated the maturity date of your loan. The letter often times will state the foreclosure process itself will be accelerated if you are unable to pay the full demand amount by the deadline noted in the letter. 

 If you do not pay the demand amount noted in the Notice to Accelerate letter, the bank will hire a foreclosure attorney and forward you a Demand Letter.  The Demand Letter officially notifies you that if your mortgage is not brought current, the bank will proceed with the foreclosure in the court system.  Any unpaid interest and late charges that are added to the loan plus attorney fees will be your responsibility. This makes stopping the foreclosure process as soon as possible paramount, because it gets much more expensive to stop in the latter stages of the process.

Foreclosure Lawsuit Stage 

If you have not responded to the Demand Letter by paying the full amount requested by the due date, then the second stage of the foreclosure process begins.  This is when the bank files a Foreclosure Lawsuit and Notice of Default (NOD) against you.  You will have 20 business days to respond to this judgement.  After responding, a hearing will be set with your county's courthouse.  In most cases, if you do not file an answer or make an appearance in court, the banks are able to get a default judgment against you and any other signers.  

Notice of Sale Stage

​If you haven't responded to the Demand Letter or Notice of Default, a Notice of Sale ​will be given after twenty (20) business days.  The Notice of Sale is when a home is auctioned off by the court system and typically takes place on the court house steps.  The property goes back to the bank as the owner of the property if there are no buyers (investors who typically pay off the upfront amount owed with a money order).  After the auction has gone through and the sale has been confirmed, the new owner of the property will receive a temporary proof of ownership or a sheriff's deed which allows them to take possession of the home.  Once the house is auctioned, in most states, the eviction of tenants process begins.  Eviction is approximately a two to four week process after the sale of the home has been finalized.

Breathe Easy!  There are federal and / or lender-specific programs designed at every stage of the process to help you avoid foreclosure.  Our housing counselors will "hold your hand" to the quickest and most beneficial resolution for you.