Understanding the mortgage foreclosure process can help you if you want to save your home or if you are interested in buying property before it goes to the foreclosure auction. Each State has its own mortgage foreclosure laws and so you need to find out exactly what applies in your State.
However, there are two basic types of foreclosures:
- Judicial foreclosures
- Power of Sale foreclosures
In State that use judicial foreclosure laws this means that a lender has to go through the Court system to get a non-paying homeowner out of their house. This usually takes longer then a non-judicial foreclosure. Power of Sale foreclosures are based on the terms of the mortgage agreement and often can happen quite rapidly.
Generally what happens after your mortgage payments are 60 to 90 days behind is that a lender will have to send you a “Notice of Default” and provide you with the opportunity to reinstate your mortgage. At this point it is usually often difficult to reinstate a mortgage if you do not have equity in the property. During the time period when you failed to pay the mortgage, additional fees have accumulated in addition to interest, so now you owe significantly more than your last balance.
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