Frequently Asked Questions

Foreclosure is a legal process that allows a lender to take back a property when a borrower stops making mortgage payments. It can be an expensive and damaging process for the borrower. How does foreclosure happen? How does it happen? When a homeowner defaults on their mortgage, the lender can start the foreclosure process. The lender may send a notice demanding payment. If the homeowner doesn't respond or make a payment, the lender may auction off the property. Types of foreclosure Judicial foreclosure: The lender files a lawsuit with the court. Power of sale foreclosure: Also known as statutory foreclosure, the lender sends notices demanding payment and then auctions off the property.

The foreclosure process is a legal action that takes place when a lender takes control of a property because a borrower has missed mortgage payments. The process can range in time from 3-12 months. Steps in the foreclosure process Initial Delinquency: The lender sends a notice of default to the borrower. 90 Day Delinquency. Notice Of Default: After 90 days of delinquency, the lender no longer accepts partial payments. Pre-Foreclosure: The borrower is served with a summons and complaint. "3-6 months" Foreclosure: A lawsuit is filed against the burrower in an attempt to collect the debt. "4-6 months" Sale Date: The lender sets an auction date. "4-12 months" Eviction: The ex-burrower is forced to surrender the estate.

Foreclosure Options include strict foreclosure, short sale, forbearance, loan modification refinancing, repayment plan, moratoriums and bankruptcy. Strict Foreclosure A judge orders the borrower to pay the mortgage balance by a set date. If the borrower doesn't pay, the lender takes ownership of the home. Short Sale The homeowner sells the home for less than the mortgage balance. This can help avoid foreclosure. However, the borrower would lose the equity in the home. And liens or fees will roll to the borrower's credit. Traditional Forbearance The homeowner is placed on a repayment plan. Must not be in an active foreclosure to be eligible. This can help prevent foreclosure and relieve financial pressure. Loan Modification Any missed mortgage payments would be placed on the rear of the loan. Bringing the borrower current and providing a fresh start. This can be used to stop a foreclosure. Moratorium This is like a loan modification, only without the trial payments. Deed In Leu Of Foreclosure The homeowner surrenders the home to the bank. Must not be in an active foreclosure to be eligible. Bankruptcy The homeowner eliminates debts or establishes a repayment plan. Must be able to pay the mortgage payment and the bankruptcy payment. This can help save the property. Temporary fix. It only postpones the foreclosure sale date. In a few months, the mortgage company accelerates proceedings and restarts the foreclosure process.

To stop a trustee sale just 24 hours before the auction, your options are extremely limited, but involve either immediately paying the full loan amount (reinstatement), filing for bankruptcy to trigger an automatic stay, or getting an emergency court order (like a TRO), with filing bankruptcy or a lawsuit being the most likely, albeit difficult, last-minute legal tactics.

Yes, you can often get a loan modification after bankruptcy, especially with a Chapter 13, where it's a common strategy to keep your home by adjusting loan terms. While a post-discharge modification is possible (often for mortgages where personal liability was discharged), it requires lender approval and often court approval, with different rules for Chapter 7 vs. Chapter 13 cases.

Neither a deed-in-lieu (DIL) nor a short sale is "good" for your credit, but both are generally better than a full foreclosure, though their credit impact is very similar, often just a 100-150 point drop, reported as "not paid as agreed," but a DIL might look slightly better as it's a direct handover, while a short sale involves a buyer, though lenders often require a short sale attempt first; the key is avoiding the official foreclosure record, but both have similar waiting periods for new mortgages (2-4 years) and potential tax implications.

Hawaii generally has a much longer foreclosure timeline than Florida, with data showing Hawaii taking over a year (around 1,600+ days in recent years) and Florida often around 135-180 days or more, though Hawaii uses a judicial process with potential delays while Florida also involves court proceedings and strict rules, making timelines highly variable, especially for judicial states.