The Foreclosure Process

Foreclosures come in two types: judicial and non-judicial. A judicial foreclosure is one wherein your lender must go to court in order to seize your home. This makes it considerably expensive for your lender, and can take much longer to complete.

A non-judicial foreclosure, on the other hand, is based on the state's statutory requirements. In this setup, lenders don't have to go through the court system to foreclose on your home. This kind of foreclosure can take as little as two months. In California, the average time is four to five months.

In either case, once your lender decides to foreclose, they will record a Notice of Default (NOD) at the county office where your home is located. This usually doesn't happen until you miss your third payment, but once it does, it progresses fairly quickly. Within 10 days, your lender will publish the NOD in the local paper, and by day 30, you will receive the same notice in the mail.

The NOD outlines the steps you need to take to resolve the problem. You are usually given three months from hereon to get your account current. Otherwise, your lender can schedule a sale date and your house can be sold within the next month. Once it's sold, you have ten days to leave the property.

As you can see, time is of the essence when you're facing foreclosure. This is especially true in states that have non-judicial foreclosure laws, such as California. You can see a more detailed description of the foreclosure process in our Foreclosure Timeline.

If you're facing foreclosure, there are two things you can do: 1) Request a loan modification and get a chance to save your home; or 2) Arrange a short sale. A short sale won't let you keep your property, but it'll minimize the credit damage compared to a foreclosure.

Loan Modification Case Studies