{"id":53,"date":"2009-02-28T09:35:39","date_gmt":"2009-02-28T16:35:39","guid":{"rendered":"https:\/\/homebuyinginstitute.com\/mortgage\/?p=53"},"modified":"2024-10-13T09:21:00","modified_gmt":"2024-10-13T16:21:00","slug":"what-happens-during-the-foreclosure-process","status":"publish","type":"post","link":"https:\/\/homebuyinginstitute.com\/mortgage\/what-happens-during-the-foreclosure-process\/","title":{"rendered":"What Happens During the Foreclosure Process?"},"content":{"rendered":"\n

During the first quarter of this year, more than 95,000 homes in the United States had a foreclosure filing. Most of them will end up being foreclosed on, with the bank or government taking ownership of the property.<\/p>\n\n\n\n

The point being: home foreclosures are a regular occurrence in America. At any given moment, thousands of American homeowners are losing their homes to foreclosure.<\/p>\n\n\n\n

Summary:<\/strong> This guide explains how the foreclosure process works, steps that are involved, and specific actions homeowners can take to avoid being foreclosed upon if they’re behind on payments.<\/p>\n\n\n\n

Judicial vs. Non-Judicial Foreclosures<\/h2>\n\n\n\n

The foreclosure process varies from one state to the next. The main difference has to do with the legal documents used when transferring real estate.<\/p>\n\n\n\n

Some states use mortgages for this purpose, while others use deeds of trust.<\/p>\n\n\n\n

Generally speaking, states that use mortgages have a judicial<\/strong><\/em> foreclosure process, and the states that use deeds have a non-judicial<\/strong><\/em> process.<\/p>\n\n\n\n

Judicial Foreclosure: Courts Are Involved<\/h3>\n\n\n\n

In a judicial foreclosure, the bank or lender must go through the courts before they can foreclose on the home. The judicial process provides more legal protections for homeowners, but it can be slower and more costly as well.<\/p>\n\n\n\n

Non-Judicial Foreclosure: No Courts<\/h3>\n\n\n\n

In the non-judicial foreclosure process, the bank or lender does not have to go through the courts. That’s because the deed usually contains a “power of sale” clause. This clause allows the lender to foreclose on the property and sell it to satisfy the debt.<\/p>\n\n\n\n

With a non-judicial foreclosure, the lender simply has to send a letter of default to the homeowners. In most cases, they have to file a Notice of Default with the county as well. But the courts don’t actually have to review<\/em> the case. So the process moves more quickly than it does in the judicial states — generally speaking.<\/p>\n\n\n\n

Which foreclosure process do you have in your<\/em> state? You’ll have to look it up. You can also refer to this state-by-state breakdown<\/a> on the NOLO.com legal website.<\/p>\n\n\n\n

Basic Steps in the Foreclosure Process<\/h2>\n\n\n\n

As mentioned earlier, the process will vary from state to state. It can also vary slightly from one county to the next, within<\/em> the same state.<\/p>\n\n\n\n

But the basic steps are generally the same, and they look something like this:<\/p>\n\n\n\n

Step 1: The Homeowner Misses Payments<\/h3>\n\n\n\n

The whole process begins when a homeowner falls behind on the mortgage payments.<\/p>\n\n\n\n

Important: When a homeowner gets behind on their payments, foreclosure is not<\/em> inevitable. Some homeowners temporarily<\/em> fall behind but eventually get caught up again.<\/p>\n\n\n\n

Most lenders will offer ways to get get back on track, such as:<\/p>\n\n\n\n