Foreclosure Timeline

Everyone's heard of foreclosures, but how do they really work? Knowing how one thing happens is vital to preventing it. Here's a quick peek into the foreclosure process and what happens at each step.

Collections Stage (30-90 days)
This period starts when you miss your first payment. Initially, your bank may take steps to help you stay current before taking any drastic measures.

From day 16 to 30, your bank starts assessing late charges. By day 45 to 60, if you still haven't caught up, you will receive a letter (known as a breach, demand, or NOI) informing you that the mortgage terms have been violated. You will then be given 30 days to pay the charges and resolve the situation.

Pre-foreclosure - NOD - Notice of Default (90 days)
Pre-foreclosure starts when your lender files a Notice of Default (NOD) or breach at the county office where your property is located. A “Constructive Notice” is given to the public at the time or soon after the recording. Technically, the foreclosure process starts at this point.

After the NOD is recorded, you will receive the notice in about 10 days. Within the next 30 days, the trustee also informs all the other creditors collateralized by your property of the notice.

A Reinstatement Period is also initiated at the time of the NOD. In California, this gives you up to 90 days to settle the amount you owe.

Midpoint (60 days before Auction Date)
From here on, your exit options start to dwindle. The terms vary from lender to lender, but the trend is that they get stricter the longer you hold off payments. However, if you do get current or reach another arrangement, the NOD may still be withdrawn and your case resolved.

Pre-Trustee Sale - NOS - Notice of Sale (21 days up)
In this stage, a Notice of Trustee Sale (NOS) is posted on your property, advertising it to the public. The notice stays up for at least three weeks and includes the time, date, and location of the auction. You can still settle your payments and reinstate the loan 5 days before the auction date.

Trustee Sale (Auction date)
When your home gets auctioned off, you will be given 10 days to leave the property. On the 11th day, a sheriff will come to move you out.

If you are struggling with your mortgage payments, you basically have two options to avoid foreclosure: 1. Keep your home with a loan modification, or 2. Short sell your home.

Loan Modification Case Studies