If you are from
the damaging effects of foreclosure, knowing the foreclosure timeline can help you know what to
expect. It may also help you plan what to do next. Here’s the timeline for the foreclosure spiral.
Day 1 – Mortgage
payment is missed. If you know the payment is going to be later
than the grace period, call your lender or servicer (the company who collects the payments). Ask if you can
lower your payment with a mortgage refinance.
Day 16 – Grace period
has ended, and a late fee has been assessed. Expect to start
receiving calls from the lender.
Day 30 – If the
payment is not received by the end of the business day, your credit will be hit for a 30-day late
Day 45 – You are now
two payments behind. The lender or servicer will send out a demand
letter reminding you that you are now in default. You have 30 days to come current on payments or make
arrangements. There is still time to consider mortgage refinancing, even if it’s a bad credit
Days 90 to 120 – The
mortgage is 3 months behind and your servicer has contacted the lender’s foreclosure department. In non-judicial
foreclosure states, a trustee begins the paperwork to initiate foreclosure. At this point, your lender may not accept any payments, even if you are
mortgage refinancing to pay off the loan.
Days 120 to 180 – You
still have a small time frame to come current on your payments on your own or through a loan
modification. If the payments are not brought current, foreclosure
proceedings will go forward. Depending on your state, a Notice of
Trustee Sale may be posted. This notifies the public as well as the homeowner of the auction date, opening bid,
time and location.
Day 180 to 365 – A
loan modification or bringing past-due amounts current may still be an option. Neither of these steps totally cancels the foreclosure process. If a payment is missed, or you fail to meet the terms of the agreement with
the lender, the process moves forward. You may want to consider
selling the house to avoid foreclosure. If you have someone who
wants to buy your house, be aware of one detail. The lender can
approve the house to be sold for less than what you owe. However, you may have to pay taxes on the bank’s
Depending on your state, your house
can be sold at public auction in as little as 120 days from the first payment missed. If your state requires that the lender goes through the court system to
foreclose, you may have more time, maybe up to a year. The Foreclosure timeline ends when either you sell the
house or you are finally evicted.