How Late Do You Have To Be On A Mortgage Payment Before They Start Foreclosure?

Many people have questions about foreclosures these days. One of the many questions being bandied about is how late must I be on my mortgage payment before foreclosure proceedings begin.

Since late 2008, there has been no hard and fast answer available to this question. At the end of 2008 there was a moratorium on foreclosures put into effect by Fannie Mae and Freddie Mac, the two largest buyers of mortgage backed securities in the world now owned by the United States Government. The moratorium was in effect between November 26, 2008 and January 9, 2009. The moratorium prevented over 16,000 borrowers who were more than 3 months behind on their mortgage payments from being foreclosed upon during that period.

Prior to the foreclosure moratorium the first day the payment was missed began the process of foreclosure. These days most borrowers must be at least 3 months late on their mortgage before foreclosure proceedings begin. The borrower can further delay the foreclosure proceedings if they make an effort to contact their lenders at the first sign that they may have difficulty making their mortgage payment. Lenders these days are very willing to work with a borrower to prevent foreclosure. It is in a borrowers best interest to prevent foreclosure at any cost.

Foreclosure proceedings generally take from 3 months to 1 year and follow a strict legal timeline beginning at day 1 when the Notice of Default has been recorded within the county the property is located. The person who is being foreclosed upon must receive a mailed Notice of Default within 30 days of the Notice being recorded. 3 months after the Notice has been recorded and sent, a sale date is set. 25 days before the date of sale a notice of the sale is sent to the IRS. 14 days before the sale a Notice of Sale must be recorded. 5 days before the sale is the expiration of the right to re-instate the loan—the person facing foreclosure loses the right to come current on the loan and prevent foreclosure. On the date of the sale the property is sold to the highest bidder and the proceeds from the sale are used to pay off the loan still on the property.

Remember that the person being foreclosed upon is still financially responsible for the loan amount remaining after the proceeds from the sale have been applied to the original loan amount.