These days, you can’t read the headlines without noticing that there are many foreclosed homes around the country. Since it is so prevalent, we thought it would be best to offer a brief explanation of how the foreclosure process works. First of all, a little clarification. “In foreclosure” is the process that leads up to being foreclosed. In addition, we are offering an outline of the process; the actual timeline will vary from bank to bank.
As you know, there are monthly mortgage payments when you buy a house. If you miss a month, you will get a notice reminding you that you missed a payment. You will get a similar notice if you miss the next month as well. If you miss another month, you’ll receive a stern notice. The fourth or fifth month missed will net you a packet of legal documents that explain the foreclosure process to you. You will also receive a notice of a Sheriff’s Sale that will take place two to three months out. The bank that owns your mortgage will most likely buy your house in the Sheriff’s Sale.
Let’s break away from the timeline for a minute so I can explain something else. Some people who’ve missed a month or two believe that if they resume their payments, they are no longer in the foreclosure process. This is incorrect. If you miss one payment, you are in the process. The only way to get out is to be paid up in full. Otherwise, you are still in the process of foreclosure. OK. Back to the timeline.
After the Sheriff’s Sale, you have a Right to Redemption period that lasts six months. In the Right to Redemption period, if you repay your mortgage in full, then you get your house back. Chances are, if you’ve missed a payment or two, you won’t be able to pay off your mortgage in full. So, when the Right to Redemption period is over, and the mortgage hasn’t been repaid in full, the home is formally foreclosed.