A Homeowner’s Guide to the Foreclosure Process

If you fall behind on your monthly mortgage loan payments, your creditor has a legal right to repossess your house. The process of repossessing your home is known as foreclosure, and it varies in each state in terms of notices that must be mailed, the redemption periods, and the scheduling to auction off your property. In general, most mortgage companies begin foreclosure in about three to six months after you first miss a mortgage payment.

Falling behind on your payments

Lenders recognize that sometimes homeowners face short-term financial problems, so they will not immediately begin to foreclose on your home after your first missed payment. However they do begin to charge late fees after 10 to 15 days. For this reason, it is important to keep an open line of communication with you lender if you first miss a payment. After 30 days of missed payments, you are considered to be in default and the foreclosure process can accelerate if you ignore your lender’s phone calls.

Auctioning off your property

All states permit judicial foreclosure, a process where your lender files suit with the judicial system and you receive a payment notice in the mail. Once you receive this notice, you have 30 days to respond with payment or else your property can be put up for sale in an auction to help your lender recover a portion of the mortgage loan back. If your property is sold at auction, you have a very limited time to vacate your home and find a new place of residence.

Issuing an automatic stay

Filing for bankruptcy automatically stops the foreclosure process by issuing an automatic stay. However, your creditor will eventually be able to resume the foreclosure process, so it’s important to speak with your attorney about how a Chapter 13 bankruptcy petition can help you keep your home.

If you’re facing foreclosure, contact Cutler & Associates, Ltd. at (847) 868-2265. We specialize in helping Aurora and Schaumburg area residents resolve their consumer bankruptcy issues. By calling today, you can stop collection calls, UCC 1 filings, and asset sales.