There are a number of factors that will influence what happens. Primarily: 1) Is this a Trust Deed or Mortgage State 2) The lender and how. show more There are a number of factors that will influence what happens. Primarily:
1) Is this a Trust Deed or Mortgage State
2) The lender and how aggressive they are in going through foreclosure
3) What is your prior history of making payments.
The way things work is generally this way:
When you are about 60 days late your loan gets transferred to to the bank's loss mitigation department. They normally will file a Notice of Default to indicate that foreclosure is possible. They also spend some time trying to contact the owner and working out some agreement that can keep the owner in the home and paying. If there is a reason for the nonpayment, such as a major income earner being out of work for awhile but is back making money, they might forgive the back payments.
If the borrower has had several years of history of reliable payments, the LM unit will normally work a little longer and harder to try to work things out. If there are indications that the owner can't make payment, they will go immediately to a foreclosure action. This process depends on whether you are in a Trust Deed or Mortgage State.
A Trust Deed State is fairly quick. The LM just notifies the trustee for the property, who starts the foreclosure process and in about 8-10 weeks after that the foreclosure is completed, for a total time of 4-12 months
If it is a mortgage state the LM must take the owner to court, and the process is much longer, from 6 months to 2 years, depending on the state, the court backlog, and if the owner contests the foreclosure in anyway. So the time for this is generally 8 to 26 months.
Source(s): real estate investor and former licensed real estate agent
rlloydevans · 8 years ago