How The Home Foreclosure Process Works

If you are facing hard economic times because of a loss of a job or some monetary setback, and you own a house, you may be having difficulties keeping up with your payments. You are not alone. There’s more than 177,000 homes in foreclosure just in the state of Florida currently. And that figure is down from just 2 years ago.

Of course, your house may never go as far as going into foreclosure. If you can hang in there and stay abreast of your payments, you could be able to circumvent the foreclosure process altogether.

But if the spectre of foreclosure is bothering you, you may be considering how the foreclosure process works. Here’s a top level view of what might occur. Of course the method is different from state to state, but here's what may occur.

Notice To Accelerate

If you've missed a loan payment or two you may receive a letter from your bank reminding you you are behind on your payments. You may continue to get these letters for 2-3 months.

If you get past 60 days overdue you'll receive a “Notice To Accelerate” letter. They will be demanding payment and threatening court action if some portion of the loan payment isn't made. If you would like to avoid foreclosure this is the time to reply and contact the bank. You could be able to work something out.

If you fail to respond you could be putting yourself in a bad position. The nicest thing you can do is begin dealing with the bank.

Demand Letter

If you don't respond by the stated date the lender may send you what is often known as Demand Letter. This is formal notice that if you don't pay they may file foreclosure papers with the court. Your are now formally in the court system.

The lender will typically have their own attorney at about that point.

Notice of Default

Now things are getting serious. The lender’s lawyer will file the foreclosure and you will get a Notice of Default. This legal document will show the amount that needs to be paid. It'll give you 20 to 30 days to respond.

Notice of Sale

After the 20 to 30 day period, if you've not answered, the lawyer will file a Notice of Sale. This notice will set an auction date for the property, usually inside 30 days of the notice. This notice goes in the paper and your house will legally be put up for auction. The sale generally takes place in front of the court house. If someone buys your house, they can usually be required to pay in full inside 24 hours. Your home now is theirs.

This Is The Process

In a judicial foreclosure state, this is often what happens. The process can be stopped at any time before the sale date. Once the sale goes through there is little you can do.

Remember the lender doesn't want to sell your house any more than you do. They typically lose money and they don't want to be in the home selling business. Respond fast and you could have a chance to save your home. Consider hiring a foreclosure attorney who understands foreclosure defense. They can help you get thru this process.

Rick Hart is an internet business expert. He provides tools for foreclosure lawyers in Tampa that help with loan modifications, short sales and foreclosures.