Hey, this is Mike from Mike Buys Houses, and earlier this week, I was talking with a homeowner who asked what happens if your house was in foreclosure basically they were wondering what is the foreclosure process timeline. Simply put, what does the actual foreclosure process look like and what actual steps should they expect?
Basic Foreclosure Assumptions
If you are facing foreclosure, there is one basic assumption that I can make, which is that there have been a few missed payments on the property. Typically, the banks like to get paid on the first and/or on the fifteenth, and so if they haven’t been paid by the 15th, your payment is going to be considered late. Normally, you will have a couple of missed / late payments before they will start foreclosure.
The bank will normally send out a ‘Late Notice’ along with a late payment fee first, and they use this as a sort of warning. This would be the first sign that the foreclosure process is imminent. If you have 2 to 3 missed payments, then the bank is going to reach out and try and figure out what is going on.
As mentioned before, the bank likes to get paid, and so they are not looking to go through foreclosure. Instead, they are going to want to work with you to try and find a happy middle ground, where they are confident you can make monthly payments. So, if the bank reaches out asking to discuss a loan modification with you, this is something that you should strongly consider as it is a tremendous option to avoid foreclosure. You might also pursue a voluntary repossession, which is something that the banks may consider to avoid foreclosure process.
You should expect these types of notifications within the first 3 months of missing payments.
Notice of Default
Typically around the fourth missed payment, the bank will send you a notice of default, which is basically when they’re actually starting the foreclosure process. Shortly after this, depending on the state you live in, you’re going to be looking at a notice of trustee sale, which is basically the bank going even further in the process of repossessing the property. This helps you understand the foreclosure process timeline
At this point, you are really going to need to dedicate some time to figuring out things pretty quickly as you are well into the foreclosure process. Most options will revolve around you selling the property, of which, you really have 3 primary options to consider.
You can sell with a realtor, but you are going to be facing steep discounts on the sale since you are against the clock and the realtor knows the severity of the situation, so they will discount to improve the speed with which you can close. Additionally, you are going to need to have good equity in the home.
If your house is in poor condition, or if you don’t have a ton of equity in the house, you can also sell for cash. This is by far your fastest option to close, however, you will be selling for a fraction of the actual value of the home. Cash is a lot more expensive to use, and as such, requires a steep discount to account for the brevity with which a sale can be finalized.
However, if your house is in poor condition or you simply don’t have enough equity, you can also sell creatively on terms, which is what we specialize in. Terms allow us to help homeowners facing any situation. You move on from the property, collect monthly payments, and will net more from the sale of the home than with a realtor or by selling for cash, and there are no realtor fees!
If you need to move quickly, you have low equity in the house, or if the home is in poor conditions, no matter your situation we can find a deal that will get you out of the property quickly and provide you with good value for your situation.
If that sounds appealing, reach out by calling me at 267-984-4765 or fill out the form below.