When Must a Resident Be Informed of a Foreclosure?

If you are facing possible foreclosure on your home, take the time to become familiar with your state's foreclosure laws and time lines. Every state handles foreclosures differently, including notification steps and scheduling of the foreclosure auction. Foreclosure proceedings can be completed in as little as two months in Texas or can take as long as six months in Nebraska. Each state also regulates when a resident must be informed of a foreclosure, whether they own the property or rent it.

Notice to Accelerate

You are considered to be in default on your mortgage after 30 days without making a payment. Typically, after 60 days the lender will begin the foreclosure process, but you may be able to stall the process if you have been in contact with the lender since the first month of missing a payment. Once your payment is late by 60 days or more, you may receive a Notice to Accelerate, and if you fail to bring the loan current, the lender may accelerate the due date on the loan and begin foreclosure proceedings.

Demand for Payment

If the amount due is not paid by the date indicated by the lender in the Notice to Accelerate, the next document you may be receiving is a Demand for Payment letter, drawn up by the lender's attorney. The demand letter is to formally notify you of the next step the lender will take if you do not respond with a payment, and typically, you would have 30 days to bring your mortgage current or the foreclosure process will move forward.

Notice of Default

If you fail to respond to the demand letter, the lender would choose the appropriate type of foreclosure to pursue for your state or in accordance with your mortgage contract. The lender will initiate a judicial or non-judicial foreclosure; whereby, a judicial foreclosure must be processed through the court system and a non-judicial foreclosure is handled solely by the lender through a power of sale clause in the mortgage contract. You will receive a Notice of Default, usually anywhere from 60 to 90 days after your first missed payment, and this is your formal notice of foreclosure and lists the total amount due.

Notice of Sale

If you fail to respond to the Notice of Default within 20 to 30 days, you would be presented with a Notice of Sale. The notice establishes the foreclosure auction date for your property, and it must be posted in an adjudicated local newspaper and somewhere on your property, for a specified period of time prior to the auction. Once all publication time period requirements have been met, the property will be sold at auction to the highest bidder.

Renters

The Protecting Tenants at Foreclosure Act of 2009 protects renters who are subject to possible eviction when the property owner loses the home to foreclosure. The act provides that leases signed prior to foreclosure proceedings will continue, and the tenant will be allowed to stay until the end of the lease. Month-to-month renters are entitled to 90 days notices before having to vacate the properties, which is longer than any states non-foreclosure notification period.