When you find yourself unable to make a mortgage payment, you may feel overcome with fear of a foreclosure. You should know what to expect during the foreclosure process and what you can do to stop or delay it. Knowing more about the process can help calm your nerves.
1. Payment default
Foreclosure could start with your first missed mortgage payment depending on your lender’s terms. Some lenders allow more missed payments before they consider it a payment default.
Many lenders are willing to work with you when you are unable to make the deadline. The sooner you contact your lender, the better your chances are of coming to an agreement and preventing a foreclosure.
2. Notice of default
The lender will send you a notice of default that informs you how long you have to catch up on the missed payments before the foreclosure process officially starts. Most lenders don’t send a notice of default until there are at least three consecutive missed payments.
3. Notice of trustee’s sale
The lienholder records a notice of trustee’s sale with the county. This notice includes the time and location for the sale as well as the minimum opening bid. There are three types of foreclosure in Texas: non-judicial, judicial and expedited. Most cases go through non-judicial foreclosure, which doesn’t require court approval. Because it doesn’t require court approval, it’s faster than judicial foreclosure.
4. Trustee’s sale
Lienholders attempt to sell the home through a public auction. If someone buys it, the winning bidder receives a trustee’s deed. They are now the new owner of the house, so it’s up to them how long they allow the previous owners to stay inside of the house.
5. Selling the property
If no one buys the house through the public auction, the lienholder becomes the owner of the property. From there, they typically sell it through a broker or a real estate owned asset manager.
6. Eviction
Once the property has a new owner, you may receive a notice to vacate that gives you a set amount of time to move out. Usually, this only gives you three days to move. Some lenders will cover the costs of your moving expenses. If you were to stay inside the home after the allotted time to vacate, the owner could file an eviction.
Although the foreclosure process has different phases, it could pass quickly. There are ways you could stop or delay a foreclosure that you may want to look into.