What Are the Steps in a Pre-Foreclosure Procedure?

The foreclosure procedure is similar for both judicial and non-judicial foreclosure. The pre-foreclosure stage can be divided into two basic steps that usually happen within 120 days from the default date:

  • Step 1: Delinquency. This means you have missed at least one single mortgage payment. At this stage, the servicer will send you a notice indicating that you have failed to pay your periodic payment on time. In practice, this notice is sent after 30 days from the default date.

  • Step 2: Breach letter. Within the 120 days period the lender will usually send a written notice (breach letter), informing that the actual foreclosure procedure shall start after 30 days. In this period you can still reinstate the defaulted amount plus interest and fees. At this stage, your loan servicer is required by law to help you find foreclosure alternatives.

Now, the actual foreclosure stage will vary depending on which state your property is located. Some states require a judicial foreclosure process while others allow for both judicial and non-judicial foreclosures.

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According to Federal law, a lender cannot initiate a foreclosure procedure earlier than 120 days from the default date.