Foreclosure Timeline: After You Miss Your First Payment

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

If you’re behind in mortgage payments, you might be wondering how soon a foreclosure will start. Generally, a homeowner has to be at least 120 days delinquent before a mortgage servicer (the company that handles the loan account) starts a foreclosure. Applying for a foreclosure avoidance optioncalled “loss mitigation”might delay the start date even further.

120-Day Loss Mitigation Period

In most cases, a mortgage servicer can’t start a foreclosure until a homeowner is more than 120 days overdue on payments.

Applying for loss mitigation before foreclosure starts. The 120-day pre-foreclosure 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 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.

Why apply for loss mitigation? Before giving up on your home, find out whether you qualify for a refinance under the government’s Home Affordable Refinance Program (HARP), a mortgage modification, or some other mortgage workout option. Whether or not you ultimately plan to leave, there’s no harm in seeing what you can get. Even if the servicer rejects your application for a workout, simply engaging in the process can buy you some time in payment-free shelter.

Applying for loss mitigation after foreclosure begins. If you don't apply for loss mitigation during the pre-foreclosure period, you can still apply for a loss mitigation option after the foreclosure begins. So long as you submit a 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.

Still, it’s usually a good idea to get the process rolling during the 120-day pre-foreclosure period—before you get even further behind in payments.

Breach Letters: Warning Before Foreclosure Starts

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:

  • the nature of the default (for example, you didn’t make payments)
  • the action required to cure the default (you have to get current on the loan)
  • a date by which you must cure the default, 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 pre-foreclosure period.

Getting Help

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 an attorney or a HUD-approved housing counselor.

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