Steps in the Foreclosure & Sale Process
- If you are being foreclosed upon, know the steps and the laws to protect yourself.house image by hans slegers from Fotolia.com
A foreclosure is a multi-step process that begins six months from the date of the homeowner's last mortgage payment. Laws vary state to state. For example, Georgia only has a 37-day process period, while New York's is 445 days. Connecticut's judicial procedures mean that a lender must prove that the borrower is in default, while West Virginia's non-judicial procedures mean that a deed of trust---with the power of sale clause---will suffice. However, the course of action is generally similar throughout the United States. - This is a document the borrower will receive after they have missed payments for a period of about three to six months. The purpose is to serve as an official notice to the homeowner that the foreclosure process has begun, and also is referred to as the preforeclosure period. The lender will order a record of the notice to be completed at the county recorder’s office. The notice of default is immediately followed by a reinstatement period, giving the borrower around five days, depending on the state, to become current on missed payments and any accrued fees.
- Called a Notice of Intent to Foreclose, this second document is posted on the property, filed with the county recorder’s office and published in local newspapers. The document states the time and location of the trustee sale. The sale is open to the public, and the highest bidder, who can pay in cash within 24 hours, gains the deed and possession of the house.
- After the Notice of Sale, many states a redemption period, giving the homeowner more time to live in the home, without being evicted. During this time the homeowner can attempt to pay back the lender, use a foreclosure bailout to refinance the loan, or work to repair their credit, before looking for housing elsewhere. This period could last from a few days to a year, with terms varying by state laws.
- Legally, after someone has purchased a home at an auction, the previous owner automatically becomes a tenant. The new owners can then send the previous owner a 72-hour notice to vacate the premises. If the previous owner still has not left, the new homeowners can ask a judge for a hearing to evict them. The judge will then signify a time period in which the previous owner has to get out of the house. If the previous owner still has not left, the county sheriff will give him a notice of eviction and physically remove him from the premises.
