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Foreclosure Timeline: All 50 States

What most real estate investors and homeowners facing foreclosure want to know is, “what is the foreclosure deadline?” In other words: “how long does it take?” The answer is that the foreclosure process and timeline vary from state to state. This article provides the information and resources you’ll need to learn about foreclosure laws, procedures, and deadlines for all 50 states.

As mentioned, each state will generally have a different set of rules and a different timeline for foreclosure.

  • 20 states use only “judicial” foreclosures.
  • 5 states and the District of Columbia use only “non-judicial” foreclosures.
  • 25 states used both Judicial and extrajudicial foreclosures.##

## Of the 25 states that use both types of foreclosures, non-judicial foreclosures are the most common. In fact, non-judicial foreclosure is the most widely used form of foreclosure nationwide.

I. JUDICIAL vs. NON-JUDICIAL FORECLOSURES:

The main difference between the two classes of foreclosure is the involvement or non-involvement of the court system. As you may have guessed, Judicial Foreclosures are processed through the courts. Non-judicial foreclosures are not.

Regardless of the type used, the deadline for foreclosure is always preceded by a borrower defaulting on their mortgage. Most lenders typically don’t threaten homeowners with foreclosure until two or three payments have been missed. However, once the lender concludes that the mortgage is delinquent and the homeowner will not catch up on the missed payments, the lender makes a legal filing and the foreclosure period begins.

A. JUDICIAL FORECLOSURES:

In a judicial foreclosure, the lender files a formal complaint with the court and records a legal notice of “Lis Pendens.” The complaint must state the details of the debt and why the lender should be allowed to foreclose on the property. The lis pendens gives public notice that the house is the subject of a foreclosure proceeding and implements the legal deadline for foreclosure.

If the court determines that the debt is legitimate and delinquent, it will send a notice to the owner demanding payment of the amount owed (plus penalties and foreclosure costs). The borrower normally receives 30 days to respond and satisfy the debt. If they don’t, the court will enter a judgment in favor of the lender, directing that the home be sold at a “Sheriff’s Sale” auction.

After judgment is entered, in most states that use judicial foreclosures, the homeowner has about 90 days before the Sheriff’s Sale to pay the full amount owed and stop the foreclosure process. There are other alternatives that could stop the foreclosure period during this 90-day period:

  • Negotiate a “Forbearance Agreement” with the lender that revises the terms of the loan to the satisfaction of both parties. (Most lenders do No want to foreclose because it can cost them a lot of money).
  • Sell ​​the house.
  • Refinance the loan.
  • Declare bankruptcy.

If the foreclosure process is not stopped, the property goes to a “Sheriff Sale” where it is auctioned off to the highest bidder and extinguishes all property rights of the delinquent owner. If no one buys the property at auction, the title to the home reverts to the lender and it becomes what is known as an “REO Property.” This means “R.goose mecondition EITHERwned” (by the bank or lender).

How long does the Judicial Execution process last?

This is almost impossible to predict. The court schedule for foreclosure is entirely determined by the court schedule and literally “at the mercy of the court.” However, most experts will agree that judicial foreclosures can often take over a year to complete.

Important note: Even after a home has been sold at the sheriff’s auction, some states will give the owner an opportunity to repossess their home. This is known as a “Redemption Period” and is a period of time after the foreclosure process has been completed. Even though the property will now have a new owner, the previous owner can still claim title to their home by paying the full amount of their original mortgage plus foreclosure costs and penalties.

B. NON-JUDICIAL FORECLOSURES:

Also known as “power of sale” foreclosures, non-judicial foreclosures are conducted outside of the court system by a third-party “trustee” or attorney. This foreclosure process is used when there is a “power of sale clause” in a mortgage or deed of trust. This clause establishes that the borrower agrees to the sale of his property to pay the balance of his mortgage loan in case of default.

As with judicial foreclosures, most lenders will not begin the non-judicial foreclosure process until several payments have been missed and they are satisfied that the homeowner will not catch up on the missed payments. However, once the lender determines that the borrower is delinquent, the lender makes a legal filing and the foreclosure period begins. This filing is known as a “Notice of Default” (NOD).

After the NOD is filed, the owner typically has a 90 days “Reset period” to catch up on missed payments and stop foreclosure before the lender can take further action. There are other alternatives that could stop the foreclosure period during the Reinstatement Period:

  • Negotiate a “Forbearance Agreement” with the lender that revises the terms of the loan to the satisfaction of both parties. (Most lenders do No want to foreclose because it can cost them a lot of money).
  • Sell ​​the house.
  • Refinance the loan.
  • Declare bankruptcy.

If the borrower is still in default at the end of the Reset Period, a “Trustee’s Notice of Sale” will be filed with a published date and time for an auction sale of the property. After the Trustee’s Notice of Sale is filed, the owner typically has another 21 days before the auction date. During this period, the borrower can still stop the foreclosure period with any of the alternatives listed above in the Reinstatement Period.

If the foreclosure process is not stopped, the property goes into a “Servicer’s Sale” where it is auctioned off to the highest bidder and extinguishes all property rights of the delinquent owner. If no one buys the property at auction, the title to the home reverts to the lender and it becomes what is known as an “REO Property.” This means “R.goose mecondition EITHERwned” (by the bank or lender).

Important note: Similar to judicial foreclosures, after a home has been sold at the trustee’s sale, some states will allow the owner to repossess ownership of their home. This is known as a “Redemption Period” and is a period of time after the foreclosure process has been completed. Even though the property will now have a new owner, the previous owner can still claim title to their home by paying the full amount of their original mortgage plus foreclosure costs and penalties.

THE BOTTOM LINE:

Regardless of the foreclosure process used, it is very important to be aware of the laws and procedures in your particular state. To help with that, here is a link to the Foreclosure Process: All States.

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