The Foreclosure Process

In the event a property owner becomes seriously past due in their mortgage payments (usually at lease 90 days), a collection process called foreclosure begins. To officially start the process the lender must file a public notice called a “Notice Of Default” (NOD) in the local county recorder's office. A copy of this must be sent to the property owner.

If nothing is done to stop the process, then three months later there is a second notice filed with the county recorder's office called a “Notice Of Trustee Sale” (NOS). This notice must be published once every seven days for three weeks (usually in a local newspaper). On the 21 st day, the property can be auctioned off to the highest bidder. The auction/ sale usually occurs on the steps of the local county courthouse.

At this point, the property owner loses ownership of the property.

For technical purposes a property is “in” foreclosure on the day the Notice of Default is recorded at the county recorder's office.

To induce a property owner to make past due payments, a lender will frequently send documents to the owner which have statements warning or threatening foreclosure.

However, a NOD must be actually filed in the county where the property is located for a foreclosure to officially begin. The filing of the NOD is entirely at the lender's discretion. The lender can wait indefinitely to file the NOD after the owner falls behind in their payments. Once the three month reinstatement period has passed, the lender will then record the Notice Of Trustee Sale. This document also must be recorded and is done at the discretion of the lender.

The lender can postpone or cancel the sale, but usually does so only for:

1.)Full payment of the amount behind, called arrearages;

2.)A pending sale of the property, with a certain close of escrow date set;

3.)Forbearance/repayment plan;

4.)Bankruptcy or other court action (Regulation Z violation by your lender, for example).

If none of these actions occur and a Trustee Sale is conducted as requested by the lender, the process ends. This entire process, and all the events that occur between the filing of the Notice of Default and the Trustee Sale/auction, is called a foreclosure.

Contact us for information regarding your personal situation.