A foreclosure is the process that removes a homeowner from their property due to unpaid debt. Foreclosures typically occur when a homeowner has not made their mortgage payment for several months and all avenues to work with that homeowner have been exhausted. In some states, a foreclosure is not a court process. In other states, a foreclosure must move through the court system, making it what is known as a judicial foreclosure.
In a judicial foreclosure, the mortgage company files a lawsuit in the jurisdiction in which the property is located. The mortgage company will request that the court allows for the home to be sold in order to pay off the loan and satisfy the debt. There are steps in a judicial foreclosure that must be taken in order to make it legally binding.
According to federal law, a mortgage company cannot begin the foreclosure process due to a single missed payment. Even two payments missed is not enough for foreclosure. According to law, the process of judicial foreclosure cannot begin until a property owner is four months, or 120 days, past due on their payments.
If you are late on your payments, you will be sent a notice from your mortgage company letting you know that you have defaulted. You will have a specified amount of time to settle the default before foreclosure proceeds. The mortgage company will then file a lawsuit and a judgment will be issued ordering you to vacate the premises. The home will then be put up for sale.
An experienced real estate agent can assist in finding the best mortgage option for you to potentially avoid foreclosure down the road.