How Long Does a Foreclosure Take?

WealthHow Staff Oct 28, 2018
The process of a foreclosure is very tough for both the property owner and the institute or person who has given the mortgage loan. No one makes a profit out of a foreclosure. Here, learn about the timeline for a foreclosure.
The timeline for a foreclosure differs from state to state. A foreclosure's timeline has been designed such that the property owner gets enough time to pay his remaining due installments.

The Foreclosure Process Timeline

● The process does not start if the property owner misses one of his installments. There may be situations that may have rendered him unable to do so. He can pay the installment within a certain time span. In such case, the property owner is informed by the bank that he has due payments to be made. He can pay the installment but a certain fine is imposed.
● If the property owner fails to pay consecutive installments for some time. The bank sends him notices which if ignored, the loan lender or the bank can initiate the foreclosure process.
● The mortgage loan lender files a suit against the debtor in a court of law which then issues a notice to the property owner to pay his installments along with a fine within a span of 30 days from the date of issue of the notice.
● If the property owner is still unable to pay the installments, the property auction process is initiated by the sheriff's office. Notices and advertisements for the auction are made in local newspapers.
● Finally, the auction is done, supervised by the sheriff's office.

Other Aspects of a Foreclosure

If a 'power of sale' foreclosure takes place, then the auction can be carried out by the mortgage loan lender directly. While doing the paperwork for your foreclosure process, if the clause of 'strict foreclosure' is mentioned, then the ownership of the property is directly transferred to the loan lender.
There are other important aspects in the foreclosure process too. If the debtor has taken loans from any other party, by mortgaging the same property, then those parties should be intimated before the start of the process, as the other parties also have a share in the revenue generated from the auction of the property.
If the revenue generated from the auction, does not match the amount that was given out as loan by the loan lender, then the debtor is obligated to pay the remaining amount.The timeline for a foreclosure process is a very long and hard phase for both the debtor and the loan lender.
There are ways to stop a foreclosure, like if the debtor is given sufficient time for paying his installments. There are also bailout loans available to help the debtor. The consequences are not beneficial for the debtor and the loan lender. The property owner and the lender should sit and work out all possible options to avoid the foreclosure.