Foreclosure Process | How Does Foreclosure Work

The Foreclosure Process.  How Does Foreclosure Work?

The foreclosure process is a legal process in which your lender takes possession of your home because they declare that you failed to meet some part of your agreement with them.  They may have the legal right to take the house because it was used as the security for a loan.

The foreclosure process varies from state to state, so check with your local authorities to make certain you understand how the process works in your state. I will explain it for California.

In general, foreclosure in California works like this:

Assume for the sake of argument that day 1 is January 1st. That your monthly payment is due on the 1st day of each month. And that you can no longer afford to pay.
* Jan 1 your payment is due

* Jan 16 you receive a late payment notice for Jan

* Feb 1 your payment is due and you are now 2 months in arrears

* Feb 16 you receive a late payment notice for Feb

* Mar 1  your payment is due and you are now 3 months in arrears

* Mar 16 you receive a late payment notice for Mar

* April 1 a Notice of Default is recorded
The foreclosure process has now FORMALLY commenced. You have 90 days to cure the problem or a sale date will be set for your house to be sold to the highest bidder at public auction.
* May 1st , 30 days have passed

* June 1st  60 days have passed

* July  1st  90 days have passed
A sale date is set.  If necessary, a Notice of Sale is sent to the IRS, 25 days before the sale date.
*  The Notice of Sale is recorded 14 days before the sale date.
* On the sale date the property is sold to the highest bidder at the public auction

The point to understand is that in California your house can be sold within 7 months by an aggressive lender.

In summary, how does foreclosure work in California? Typically, the foreclosure process works like this–your lender allows you to miss up to 3 payments, and then they file a Notice of Default with the intention to sell your home at a public auction; if the problem is not cured within 90 days. After 3 more months a sale date is set and 14 to 25 days later, your house could be sold. If the house is sold, it is no longer yours anymore, and so you must move.

This information has been presented for informational and educational purposes only. The writer is not an attorney. So for legal advice please speak to your attorney.

Tags: how does foreclosure work, understanding foreclosure, foreclosure in california, Foreclosure Process, foreclosure proceedings, notice of default, notice of sale, trustee sale, real estate auction