Timeline

What is a foreclosure?
Foreclosure is a legal process by which a bank, mortgage company or other creditor takes a homeowner`s property in order to satisfy a debt. Foreclosures are caused by non-payment of a mortgage (including a first, second or home equity loan) or unpaid real estate taxes. Borrowers who are having difficulty making their payments are encouraged to contact a HUD or MSHDA Housing Counselor or Legal Aid Provider for assistance.

Stages of Foreclosure

Day 1
Typically, a payment was not received on or before the due date.

Day 16
A late fee is sent to the borrower with a late payment notice from the lender.

Day 31
At this point the mortgage loan is considered in default. A second late payment notice is sent to the borrower and the lender may follow up to discuss payment arrangements. The failure to provide funds has affected the borrower’s credit score.

Day 61
The lender sends additional late payment notices and continues their efforts in contacting the borrower.

Day 91
The lender sends a “breach” or “demand” letter notifying the borrower that the lack of payment is considered a violation of the terms of the mortgage. It also discloses the borrowers right to work with the lenders representative/attorney for loan repayment or alternative options to avoid the subject property going into foreclosure. The letter describes the time limits in which the borrower must initiate contact with the representative and to also consider assistance from a housing counselor.

Day 181
If all attempts to resolve the mortgage default are unsuccessful, the lenders attorney will record an official notice of foreclosure at the local courthouse. During this time they will schedule the date for the Sheriff sale and publish the details of the debt over four consecutive weeks in the local newspaper.

Day 212
The Sheriff sale is held at the county courthouse and put up for auction. The home will be sold to the highest bidder, which is typically the lender. The officer executes a “Sheriffs deed” implementing the absolute final date that the borrower can redeem the property.

Day 213+
After the sale, some states grant borrowers a “redemption period” in which they can still repurchase the property if they have the funds. Typically, the redemption period lasts up to 6 months, but it varies depending on the specific situation. The borrower is not required to make mortgage payments during this time, however, they are still allowed to live in the home and continue to pay utilities.