(Quicker Foreclosures?) There are no rules as to “how soon” a bank will start foreclosing after someone becomes delinquent with their mortgage payments. The only requirements are that the delinquent homeowner receives a written thirty day notice of default, and that the foreclosure advertisements appear in a local newspaper as required by the Deed of Trust. Each lender seems to have its own guidelines (usually based on the investor’s instructions) as to when the foreclosure process will start. (PS—These guidelines seem to keep changing!)
The normal time frame (if anything could be described as normal) appears to be at least five months, but usually longer, before the foreclosure will start. Recently, however, there has been some lenders who have foreclosed after the Borrower is only four months delinquent.
Additionally, the lenders normally will postpone the foreclosure to allow time to consider a loan modification, or more likely, a short sale. Although these postponements still occur, there have recently been occasions where due to “investor guidelines,” the foreclosing bank will not postpone the foreclosure to consider a short sale contract. Hopefully these two observations (foreclosing after only four months delinquent and not postponing a foreclosure to review a short sale contract) are just abnormalities.
No one needs more foreclosures in their market place. Lenders should be allowing the delinquent Borrowers to obtain a true loan modification and keep their house. As this is just not going to happen, then they must allow sufficient time to review a short sale contract and not just foreclose because the guidelines require it. We all lose with a foreclosure!
Please call me at 434-951-0858 if you have questions, or visit our real estate archive for all previous tips.
William D. Tucker, III, Sr. Partner
Tucker Griffin Barnes P.C.
Where deep insight equals powerful advantage!
Charlottesville 434-973-7474 | Lake Monticello 434-589-3636