What is Foreclosure?

A judicial proceeding by lender / servicer to obtain judgment against the Borrower for Borrower’s breach of promise to pay, and to take borrower’s interest in the house, which was given as security for the promise.

What Are the Steps?

  1. Before a Foreclosure is Filed

    Demand Letter or Notice if required by the Note:
    • setting out breach of agreement (failure to pay)
    • requiring a certain amount to be paid
    • with a certain period of time

    If no payment or workout-

  2. Foreclosure Complaint is Filed:

    What is the foreclosure complaint?
    • a legal document
    • filed with the Court
    • setting out the agreement to pay (Note)
    • stating the failure to pay
    • stating the amount due
    • asking for judgment against the mortgagor
    • asking for title to the security (the mortgaged property)

    Must be served on mortgagor

    Mortgagor has opportunity to Appear and Respond
          Usually 30 days

    If no Appearance or Response-

  3. Default Judgment

  4. Reinstatement Period – all past due payments are made
          90 days from date of service of Foreclosure Complaint

    If no reinstatement-

  5. Redemption Period – entire amount of Note plus Interest and Expenses must be paid
         Longer of:
    7 months from date of service or
    4 months from date of Judgment

         If no Redemption-

  6. Judicial Sale – sale of mortgaged property to highest bidder

  7. Confirmation of Sale by Court – award of Title and Possession to winning bidder

  8. Mortgagor has 30 days of possession before eviction

  9. Eviction