What most real estate investors and homeowners facing foreclosure want to know is, “what is the time frame for foreclosure?” 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, nonjudicial foreclosures are the most common. In fact, nonjudicial foreclosure is the most widely used form of foreclosure nationwide.

I. JUDICIAL vs. NON-JUDICIAL FORECLOSURES:

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

Regardless of the type used, the time for foreclosure is always preceded by a borrower defaulting on their mortgage payments. 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 in default and the homeowner is not going to catch up on their missed payments, the lender files 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 “Lis Pendens” legal notice. 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 home is the subject of foreclosure proceedings 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 house be sold at a “Sheriff’s Sale” auction.

After judgment is entered, in most states that use judicial foreclosure, the homeowner has about 90 days prior to the Sheriff’s Sale to pay the full amount due and stop the foreclosure process. There are other alternatives that could stop the foreclosure deadline 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 could 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’s Sale” where it is auctioned off to the highest bidder and extinguishes all property rights of the defaulting owner. If no one buys the property at auction, the title to the home reverts to the lender and becomes what is known as “REO Property.” This means ”
Rgoose
mecondition
EITHERwned” (by the bank or lender).

How long does the Judicial Execution process last?

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

Important noteNote: Even after a home has been sold at the sheriff’s auction, some states will give the homeowner a chance 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 the house from him by paying the full amount of his original mortgage plus foreclosure fees and penalties.

B. NON-JUDICIAL FORECLOSURES:

Also known as “power of sale” foreclosures, non-judicial foreclosures are carried out outside 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 states that the borrower agrees to sell his property to pay off his mortgage loan balance in the event 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 in default, the lender files 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 deadline during the Reset 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 could 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 Restoration 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 usually has another
21 days before the auction date. During this period, the borrower can still stop the foreclosure period with any of the alternatives mentioned above in the Restoration 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 defaulting owner. If no one buys the property at auction, the title to the home reverts to the lender and becomes what is known as “REO Property.” This means “Rgoose 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 the house from him by paying the full amount of his original mortgage plus foreclosure fees and penalties.

THE BOTTOM LINE:

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