Nonjudicial foreclosures are foreclosure processes that do not require a court of law to be involved. However, not all states allow nonjudicial foreclosures. Below are some basic steps to a nonjudicial foreclosure.
In a state that allows nonjudicial foreclosures, you would likely to have signed a deed of trust with a power of sale provision when you took out the mortgage. This means that the mortgage company has the ability to foreclose on your property without court approval if you are delinquent on your payments.
Though the foreclosure timeline process varies between states, below is a general timeline and its significance. It is imperative to understand the timeline to prevent any loss to your rights.
1) First Missed Payment – During the first month that you missed a payment, the loan officer will give you a call and ask when you will pay. In some cases, the loan officer will also send you a notice.
2) Second Missed Payment – If you miss your payments for two consecutive months, the loan officer will call again. This time, he may ask for immediate payment over the phone.
3) Third Missed Payment – If you miss three consecutive payments, the loan officer will send you a letter to notify you of breach, and demand that you pay the remainder of your balance. Generally, when this happens, the loan company will exercise the loan acceleration clause, in which you will have to pay the balance of the loan within 30 days or they will foreclose. The loan company will be unlikely to accept partial payments at this point.
4) 30 Days After Notice – If you do not pay the remainder of the balance after the 30 days period, then the loan company will notify the trustee to begin the foreclosure process.
5) Foreclosure Notice – The trustee will then start the foreclosure process by recording a notice of default with the county’s assessor-recorder’s office. Also, he will notify you and junior lienholder of the delinquency.
6) Foreclosure Sale – The trustee will then arrange a foreclosure auction with a specific date and time. The real property will go to the highest bidder.
7) Redemption Period – Depending on the state you live in, you will have a specific redemption period of time to buy back your property from the foreclosure auction.
8) Eviction – If you do not leave your property after the deed has transferred over to the new owner, then the new owner will start the eviction process. Afterwards, the sheriff’s office will remove you and your belongings.
A foreclosure attorney is well versed in the proceedings. Moreover, he can help you negotiate a new payment plan with the mortgage company to prevent the foreclosure from going through.