If you're behind in mortgage payments, you might be wondering how soon a foreclosure will start. 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:
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.
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, though, 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:
Along with the 120-day preforeclosure period, federal law also provides you with various protections before and during a foreclosure.
Many mortgages and deeds of trust have a clause that requires the lender or servicer to send you a notice, commonly called a "breach letter," informing you that the loan is in default before it can accelerate the loan and proceed with foreclosure. (The acceleration clause in the mortgage or deed of trust permits the lender to demand that the entire balance of the loan be repaid if you default on the loan.)
Typically, the breach letter will provide the following information:
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.
To find out how to apply for a loss mitigation option, call your mortgage servicer. If you need more information about different ways to avoid foreclosure, consider contacting a foreclosure attorney or a HUD-approved housing counselor.