Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 5: Foreclosure

If you miss mortgage payments, the lender can decide to begin the foreclosure process. Most often this occurs between the 60th and 90th day of delinquency. Typically a document called a Notice of Default will be recorded with the County Recorder’s Office and a copy of the notice will be sent to you. Sometimes you may be served a Summons. These notices actually start the foreclosure process.

You may bring your loan current by making all the missed payments, late fees, and any other charges accrued. Bringing the loan payments current will cure the default and you will be allowed to continue to make regular payments. The loan may be brought current at any time up to five business days before the actual sale date. If the default is not cured by paying all back payments plus costs, or by making some other agreement with the lender, your home will be sold at auction to the highest bidder who may be the lender.

After foreclosure sale occurs, you will have no further options and will have lost all rights of possession and ownership to the new owner. The lender (new owner) can then proceed to evict you following normal eviction procedures just as if you were a tenant who had not paid rent. This process can be completed in just a few weeks. In some states, there is a redemption period. In some cases, some or all these options may still be available prior to redemption expiration.

Example: Foreclosure Timeline for California
(The foreclosure timeline and process varies from state to state. In California it is generally non-judicial and done outside of the courts but some states have judicial foreclosure. Be sure you understand the correct process and timeline in your state. Our counselors may be able to provide you with information on your state.)

Day 1
You are in default on the 2nd day after your payment is due.
Day 32
You have now missed two monthly payments.
Day 32-90
Sometime during this period you will receive a letter stating that the Notice of Default(NOD) has been recorded. The speed with which lenders record the NOD depends on the policy of each individual lender.
From this day, the next 90 days is a silent period in which you can pay lender all back payments, fees, and other charges and your default will be cured.
Sale Date
At the end of the 90 day silent period you will receive another letter specifying the date that the Trustee’s Sale will take place. This is usually 3 weeks from the date you receive this second letter.
to Cure
You have until 5 business days before the Trustee’s Sale to reinstate your loan (cure) by paying all payments, fees, and other costs associated with the foreclosure.
After the Trustee’s Sale you may have up to 30 days to remain prior to being evicted.
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