The Foreclosure TimelineIf you find that you cannot make home mortgage payments on time, you need prior information about the foreclosure process to weigh your options. Understanding the foreclosure process needs a good understanding of the foreclosure timeline. Let us find out below what the timeline is. If you miss your payment by a day, no penalties are assessed at that time. If you miss your payment date by more than 15 days, a late charge is assessed which has to be made good along with the due installment between day 16 and day 30 after the due pay-by-date. Usually a grace period typically of 15 days for bringing the loan current is already in place and defaulters generally tend to delay payment till the last day of the grace period. Lenders tend to ignore the delay so long as the borrower makes the payment within the specified grace period. If the specified grace period is crossed the late charge typically of 3% comes into effect. If you miss the next two payments, the charge builds up thrice fold onto your account and makes the task of bringing your loan current even more difficult. Past day 30 after the due pay-by-date, it is important that you not only make the default current, but you also are required to pay the late charge with it. Otherwise, the payment is mostly not accepted by the concerned lender. If you do not make the default with the applicable late charge current even after day 45 after the pay-by-date is crossed, the lender issues a demand or breach letter to you. In the letter, the lender specifies the terms of the mortgage agreement that have been violated by you. After the date of receipt of the demand/breach letter, you have only a period of thirty days to make good the default with the late charge in full. At this juncture, you will regularly get phone calls from the lender. The different US states have laws in force in respect of collection activities, the frequency of telephone calls, the timing, and the content of the calls. As per the laws, lenders cannot make calls to you during the night or early in the morning. During day 45 to 60 after the pay-by-date stage of the foreclosure process, the loan servicer can offer you a repayment plan as well as a modification of the loan. Under a repayment plan, you get to distribute each half of the first missed payment onto the second and third installments respectively. This plan can help you if the cash crunch you face is temporary in nature. The lender thereafter sends you a notice of default. If the notice period even elapses without your making good the default foreclosure proceedings are then initiated by the lender. |