Foreclosure Timeline: After You Miss Your First Payment

Generally, homeowners have to be more than 120 days delinquent before a foreclosure can begin.

By , Attorney · University of Denver Sturm College of Law

If you're behind in mortgage payments, you might be wondering how soon a foreclosure will start. The good news is you won't go into foreclosure immediately just because you miss a mortgage payment.

Under federal law, in most cases, a mortgage servicer can't start a foreclosure until a homeowner is more than 120 days overdue on payments. The 120-day preforeclosure period gives the homeowner time to get caught up on the loan or apply for and, hopefully, work out a loss mitigation option, like a mortgage modification.

Applying for a foreclosure avoidance option might delay the start date even beyond the 120-day period.

What Happens When You Miss a Mortgage Payment?

Here's what typically happens during those 120 days before foreclosure starts.

Your First Missed Payment: Late Charges Start to Accrue

After you miss a payment and the grace period expires, the servicer can charge a late fee to your account. Usually, the grace period is between ten and fifteen days. The late charge will typically be between four and six percent of your payment amount.

To find out the exact amount of the late charge the servicer can charge you after each missed payment, review the promissory note that you signed when you took out the loan or look at your monthly mortgage payment statement.

Be aware that some states have a law that limits the amount for late charges. If the state limit is lower than what the promissory note allows, state law generally overrides the note.

Your Second Missed Payment: You'll Learn About Loss Mitigation Options

Under federal law, in most cases, servicers are supposed to work with borrowers who are having trouble making their monthly payments by contacting them in person and in writing.

Live Contact Requirement. Federal law requires the servicer to make "live contact" with you, or make reasonable efforts to contact you, by phone or in person no later than the 36th day of the delinquency to talk about loss mitigation options. The servicer will likely try to contact you by phone shortly after you miss your second payment.

Though, if you initiate a call to the servicer before it calls you, that contact will satisfy the federal requirement. The servicer also has to contact you again within 36 days after each payment due date for as long as you're delinquent on the loan, even if the servicer previously talked to you.

However, if you're in bankruptcy or have asked the servicer to stop communicating with you under the Fair Debt Collection Practices Act (FDCPA), and the servicer is subject to that law, the servicer doesn't have to try to make live contact with you.

Loss Mitigation Notice. Also under federal law, the servicer has to send you a letter with information about potentially available loss mitigation options no later than the 45th day of the delinquency, and again no later than 45 days after each payment due date as long as you're delinquent. But the servicer doesn't have to send this kind of letter more than once during any 180-day period.

However, if you've filed bankruptcy, the servicer must generally send a modified letter that doesn't request payment. But if no loss mitigation options are available, then the servicer doesn't have to send the letter.

Also, the 180-day rule doesn't apply, which means the notice doesn't have to be sent more than once in a bankruptcy. Furthermore, if you're represented by an attorney, the servicer may send the notice to your attorney rather than to you.

If you've asked that the servicer cease communication with you based on your rights under the FDCPA, then it doesn't have to send the letter if no loss mitigation option is available or if you're in bankruptcy. Otherwise, it must send you a modified letter that includes a statement that the servicer may or intends to invoke its specified remedy of foreclosure, but can't contain a request for payment.

Your Third and Fourth Missed Payments

Once you're about 90 days behind on the loan, the servicer will likely send you a breach letter. Most mortgages and deeds of trust require the lender to send this type of letter before "accelerating" the loan (calling the entire balance due).

The breach letter typically gives 30 days to reinstate the loan and avoid a foreclosure. (Also, state law might also provide you with a right reinstate the loan, even after foreclosure begins.)

Typically, the breach letter will also provide the following information:

  • the nature of the default (for example, you didn't make payments)
  • the action required to cure the default (like you have to get current on the loan)
  • a date by which you must cure the default, again, usually not less than 30 days from the date the notice is given, and
  • that if you fail to cure the default on or before the date specified in the notice, this may result in acceleration of the debt and sale of the property.

If the 30-day time period expires and you haven't cured the default, foreclosure proceedings, which could be nonjudicial or judicial depending on the state and the circumstances, will begin. Most times, you'll get this letter during the 120-day preforeclosure period. Your state's foreclosure laws might also require the servicer to send you some kind of preforeclosure notice.

After you've missed the deadline to reinstate that's given in the breach letter, and you're more than 120 days behind on your mortgage payments, the servicer will usually refer the loan to an attorney or trustee.

Then, the foreclosure process will begin. If you've applied for loss mitigation, though, and that application is still pending, federal law, and in some cases, state law, prevents the foreclosure from starting until the servicer reviews your application.

Applying for Loss Mitigation Before Foreclosure Starts

If you turn in a complete loss mitigation application during the 120-day period, the servicer must evaluate the submission and inform you of the results before it can start to foreclose. Though, once the 120-day period expires, if you haven't brought the loan current or applied for (or received) a foreclosure alternative, the servicer will probably start a foreclosure.

Applying for Loss Mitigation After Foreclosure Begins

If you don't apply for loss mitigation during the 120-day preforeclosure period, you can still apply for a loss mitigation option after the foreclosure begins. The servicer generally doesn't have to review multiple applications from you, however, unless you bring the loan current after submitting an application.

Also, it's usually better to get the process rolling during the 120-day preforeclosure period—before you get even further behind in payments and foreclosure costs start to add up.

Under federal law, so long as you submit your complete application more than 37 days before the foreclosure sale, the servicer can't ask for a judgment or order of sale, or conduct a foreclosure sale unless:

  • the servicer denies your request (and any appeal period expires)
  • you decline the loss mitigation option offered, or
  • you fail to abide by a loss mitigation agreement.

Along with the 120-day preforeclosure period, federal law also provides you with various protections before and during a foreclosure.

Getting Help

Call your mortgage servicer to find out how to apply for a loss mitigation option. If you need more information about different ways to avoid foreclosure, consider contacting a foreclosure attorney or a HUD-approved housing counselor.

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