If you ask an average homeowner, most could not explain how the foreclosure process and timeline work. Sadly, there are also a number of Real Estate Agents who are just as misinformed. So I’m here to clear the air.
Given the number of foreclosures across the nation, it’s important to understand the timeline and sequence of events. Knowing your timeframes will help homeowners avoid the foreclosure trap. Here in California, for example, we have the highest number of foreclosures in the United States. Between January and June 30, 2010, California bore witness to approximately 340,000 foreclosures. That’s just foreclosures, folks. We haven’t even tapped into the Short Sale numbers, which run upwards of 50%, 60%, 70% of available inventory and higher depending on your neck of the woods.
Foreclosure just does not need to happen, and you can help by passing the information below to your family and friends.
FORECOSURE TIMELINE
Day 1: Notice of Default (NOD) Recorded. The official clock has started ticking and the countdown to foreclosure has begun. Homeowner enters the “redemption period” and has 90 days to bring loan up to date and out of default, including any penalties and fees. Homeowners will receive notification of NOD filing by mail. Always open correspondence from your mortgage provider.
Day 91: Notice of Trustee Sale (NOTS) is posted. This ends the redemption period and trustee sale date is set.
Day 112: Trustee Sale (TS) can be held 21 days after NOTS is posted. Property is sold to highest bidder at public auction.
Basically, in approximately 112 days (or less than four months) the home can be lost to foreclosure. In California, the estimated foreclosure timeline is a minimum of 120 days.
Now, I know what you are thinking. “So what! My neighbors house hasn’t been foreclosed upon and they’ve been trying to sell it through Short Sale for almost 2 years now. Banks just don’t follow that. And they’ve been living there for free.” We have all heard the stories and know how NODs aren’t always filed and there are delays once it’s been filed, etc.
While, yes, that’s true in a number of cases what most forget is postponement of the Trustee’s Sale DOES NOT STOP the foreclosure timeline. Given I’m not a lawyer and don’t know case law by hand, I want you to really digest that statement:
Postponement of the Trustee’s Sale DOES NOT STOP the foreclosure timeline.
I’m sure you can only imagine the problems homeowners are facing not realizing this piece of the puzzle. The timeline does not stop folks. Which means even though you have received postponements due to short sale or loan modification, once these dates have been reached your home can be foreclosed upon in a nanosecond. The banks can foreclose your property in an instant and the law is behind them.
For more information on laws that govern California Foreclosure, look up CA Civil Code 2924gf and 2923.5