Okay, if you already know the foreclosure process and exactly how it works... go ahead and skip this section. But, knowing the foreclosure process well can help you more effectively avoid foreclosure or get your property sold more quickly at a fair price. So... here we go...
Pre-Foreclosure is the preliminary stage of the foreclosure process before legal filings are made by the lender. This is the optimal time to stop a foreclosure because at this point your credit rating will not be affected. Some options are to speak with your lender, put your home on the market, or find a private investor who is willing to purchase or take over the existing loan.
The actual foreclosure process begins when the lender files a Notice of Default. This is a filing in the public records that indicates where the home is located and it indicates that the homeowner is behind in payments and the home might possibly be seized. In some states the notice is also placed on the front window of the home itself.
Each state is different in terms of how quickly a Notice of Default is filed. Generally, lenders will wait 60 days from the date of the missed payment before filing. During this time you can certainly work with them to make up the payments or find another resolution.
After the filing, the lenders must generally wait 90 days before selling or auctioning the property. During this respite you can still work with your lender or maybe find another source of income to help make up the back payments.
After this 90 day period, notice runs in the newspaper for upwards of 20 days alerting the public to the possibility that the home will be available for sale or auction. Once the home has been auctioned off, the previous tenants are required to move out unless a rental agreement has been made between the new owners and the previous owners.
As you can see, the foreclosure process can move quite rapidly, depending on your state’s timetable for filing. Once the Notice of Default is filed, your options as a homeowner are limited, which is why it’s imperative to contact your lender PRIOR to them filing the notice.