The foreclosure cycle is different in every state. Some states are Judicial states (which means that the foreclosure process is a lawsuit that goes through the court system)and other states are non-Judicial states (not involving the court). In general the western states use a non-judicial foreclosure process and the eastern states use a judicial foreclosure process.

While each foreclosure process is slightly different the basic processes are the same. A foreclosure process begins with 3 causes: 1) non-payment of the agreed installment payments and fees, 2) non-payment of property taxes, or 3) lapse of adequate property insurance (although some sort of forced-placed insurance is usually the first remedy for inadequate insurance). Next, some sort of notice of default or demand for payment letter is filed and sent to the mortgagee. There is a period in which the loan may be reinstated and brought current, generally between 15-90 days (depending on the state). Ads must be posted in public places, usually a local newspaper, and a notice is placed on the property announcing the sale of the property at a public auction (trustee sale). And finally, there is the actual sale of the property.

Here is a quick summary of the 4 basic foreclosure cycles:

1. Non-Judicial Foreclosure Cycle (120 days)

• Day 1 – Notice of Default (NOD) is filed
• 90 day reinstate period begins
• Day 90 – Ads are posted in newspaper & certified notice sent to property
• Notice is posted on property
• Day 120 – Trustee Sale

2. Non-Judicial Foreclosure Cycle (90 days)

• Day 1 – Notice of Default (NOD) is filed (aka Notice of Action, Notice of Trustee Sale, Notice of Sale)
• Day 1 – Ads are posted in newspaper & certified notice sent to property
• 90 day reinstate period begins
• Day 90 – Trustee Sale

3. Non-Judicial Foreclosure Cycle (21 days)

• Day 1 – Notice of Default (NOD) is filed (aka Notice of Action, Notice of Trustee Sale, Notice of Sale)
• Day 1 – Ads are posted in newspaper & certified notice sent to property
• 21 day reinstate period begins
• Day 21 – Trustee Sale

4. Judicial Foreclosure Cycle (3-6 months)

• Day 1 – Attorney sends “Demand Letter” (Pay in 10 days)
• Day 11 – Lis Pendens suit is filed
• Day 40 (- 90) – Court date, attorney gets judgement
• Day 50 (- 120) – Debtor has 10 day Right to Appeal
• Day 60 (- 160) – Ads are posted in newspaper (30 days)
• Day 90 (- 180) – Foreclosure Sale
• (Timeframes vary due to court availability)

It is important to realize that these are just general guidelines and minimum timeframes. Sometimes these foreclosure times can be longer depending on the trustee’s work load, court availability and negotiations with the debtor/mortgagee. It is important that you always seek competent legal counsel in the state you live in if you’re facing a foreclosure action. There are many legal and financial ramifications to this process.

*It is important to understand that the foreclosure process does not automatically eliminate the debtor’s obligation to repay the debt. The foreclosure is a process by which the lender tries to sell the property (that was promised as collateral) to satisfy the debtor’s obligation. If the property sale does not satisfy the loan obligation then the lender may, at the lender’s sole option, pursue other legal means to collect the balance of the debt. In the current market this option isn’t being pursued as aggressively but the lender still has the right to try and collect the full amount of the promised loan.