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Do you Know The Legal Process of Foreclosure Takes How long?

The legal process of Foreclosure Takes How Long: Your Complete Guide

Mortgages are, no doubt, the most common and sought-after way of owning the home of your dreams. However, you would also want to know more about the legal side of it before you avail of home mortgages. 

Will the legal process of foreclosure be initiated if I default a monthly payment? How much time do I get to repay the defaulted amounts to avoid foreclosure? Is there any legal remedy available to me once the lender has initiated a foreclosure process? We will answer all of these questions for you in this article that talks about the timeline involved in foreclosure’s legal process. One key point to remember before we proceed to the legality of the process would be that some of the regulations may differ based on the jurisdiction you belong to. 

What Exactly is a Foreclosure?

Foreclosure is the legal remedy available to the lender, where he can take ownership of the mortgaged property in the event of default in repaying the loan amount. A foreclosure will not be triggered immediately when one or two payments have defaulted. Rather, it requires a specific number of defaults to initiate this legal remedy against the borrower. 

The timeline and steps involved in the process vary from state to state. Lenders more often try to work a way around to get the borrowers to pay up the amount rather than proceed with the expensive and time-consuming foreclosure process.


When is a Foreclosure Initiated?

As a homeowner, you need not be worried that a foreclosure might be initiated immediately after you have defaulted a payment. The provisions of the process are usually laid down in the loan document that you enter into with the lender to avail of the loan. This legal document also lays down that the borrower should be intimated on a foreclosure initiation via a written notice. In case your payment default reaches 90 days or more, a breach letter will be sent to you, asking you to pay up the dues on a specified date. The foreclosure will be initiated if you fail to pay up the outstanding amount by the date specified on the breach letter.

State Law dictates how quickly a bank, or any other lender can foreclose on a borrower in the event of multiple monthly defaults. As we said earlier, the whole foreclosure process, the timeline, and other provisions differ based on two types of jurisdictions. 

Judicial and Non-Judicial Jurisdictions

Depending on the state you belong to, the legal process of foreclosure can be treated in two different ways 

What is Judicial Foreclosure?

What is Judicial Foreclosure?

As the name suggests, the foreclosure proceedings happen under the purview of the court. Here the lender will file a lawsuit against the borrower for not paying up the dues after the receipt of the breach letter. The court issued summons to the defaulter to appear before the court to settle the matter. In the borrower’s event not appearing, the case will be ruled in favor of the lender, giving him the legal right to put up the property for sale. This way, the lender can recover the amount.

Steps involved in A Judicial Foreclosure

1. Issuing the notice of default – In the event of defaulting payments over the loan’s redemption period, the lender will send a notice of default to the verified mailing address of the homeowner mentioning the amount and by which he has to clear the dues. 

2. Filing the lawsuit – If the borrower fails to pay the amounts mentioned on the notice by the given date, the lender files a civil complaint in the court of law. The court may direct the borrower to pay up the amounts, including the lender’s foreclosure costs. If the borrower decides to fight it out in the court, it will allow more time to arrange for funds to pay the dues. Foreclosure by the court takes more time, and the case can easily last for a year. 

3. Notice for Foreclosure Sale – In case the borrower loses the case or fails to appear in the court for the proceedings, the lender will be granted the right to foreclose the property and recover the outstanding amounts. Ideally, after 120 days of non-payment of the installments, the notice for a foreclosure sale would be sent to the defaulter. The notice will also mention the date by which the owner is supposed to vacate the property. 

It is important to note that the homeowner can stop these proceedings at any time if he pays the outstanding loan amount along with the arrears.

4. Auction – After there has been no action for any imminent payment from the borrower’s end, the lender will put the house for public sale after obtaining the right to sell the property. The sale happens on a bid basis where the highest bidder will get the property. If there were no bidders or buyers, the lender himself would buy the property using a credit bid based on the borrower’s amount owed. Here the lender might later put up the property for sale. 

If the property is out for sale or auction, the homeowner would be required to vacate the house; else, an unlawful detainer suit will be filed against them.

What is a Non-Judicial Foreclosure?

This method of foreclosure is also referred to as the non-judicial power of sale foreclosure. In this scenario, the foreclosure action happens as per the terms of the deed of trust. When availing the loan, if you have entered into such an agreement, the authority to sell the property is given to a third party known as a Trustee agreed upon by both the lender and borrower. 

The foreclosure proceedings in the power of sale approach happen faster than the former one as the Trustee can go ahead with the legal process without interference from the court. Here the Trustee will initiate the process in the event of default in payment of the monthly installments by sending a notice for a public foreclosure sale of the property. Like the judicial process, the property will go to the bidder who has quoted the highest price.

In this form of foreclosure, one can expect the whole process to be complete by 2 to 3 months from the date the foreclosure proceedings are initiated. 

Another important point to note that the whole process is quite time consuming and involves many costs. For this reason, most lenders would not want to take up the foreclosure process as an option to recover the dues. 

Can you stop the foreclosure process?

If you happen to belong to a state that follows a judicial foreclosure, then you will have more time to challenge or avoid foreclosure.

In a power of sale foreclosure, the owners have certain rights to stop the foreclosure, seeking an injunction against the process. The owners should also receive adequate notice and time to be able to clear the outstanding mortgage payments. 

Another easiest way is to stop the sale of your real estate property, or the legal proceedings is to make all the payments immediately or ask for a date on which you can pay up the dues. This completely depends on the discretion of the lender. 

Facing foreclosure is not easy and definitely for the meek. Hence be informed about all the legal remedies available to you or be prompt with your payments. Be aware of all complications a default payment might entail. You can end up with lower credit ratings, lose your credibility, and thereby the possibility of getting loans. 


We hope this article has helped you find the answer to your question: foreclosure’s legal process takes how long. In case you happen to have any more queries in this, do write to us in the comments.

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