Is It Too Late If I Have Received A Foreclosure Notice?

The foreclosure process is long and arduous. It varies from state to state, but in California it can take up to 200 days even if everything happens smoothly and timely—which doesn’t always happen. Individual lenders also have their own policies and best practices meant to prevent messy legal battles and lost money.

Nonjudicial Foreclosure

It’s not too late to stop a nonjudicial foreclosure until the trustees sale has officially occurred, which at its spediest and most expedited date, could only really occur around 200 days after the initial payment has been missed. If you have recently missed a payment, don’t worry, you probably have plenty of time to save your house.

The most important step to avoiding foreclosure is to talk to your lender. It can be uncomfortable, but lenders appreciate it. If you’re a lender, a borrower who opens lines of communication and has a clear story for their financial situation is always a good sign. It isn’t too late if you’ve received a basic foreclosure notice.

There are a variety of kinds of foreclosure notices that you can receive. Here are pa few types:

Types of Foreclosure Notices

Notice of Missed Payments

This would be the first kind of “foreclosure” notice that you could receive as a borrower. At this stage in the process, it’s possible that your lender isn’t even tossing around the word “foreclosure.” They may simply be sending you a letter to inform you that you’ve missed a payment. In this case, as long as you get your mortgage back on the right side of the payments, you’ll be fine. You are technically in default, but no official default or intention to foreclose has been filed.

Borrowers in this early stage of missing a payment have nothing to worry about as long as the reason for their missed payment was a temporary financial problem that can be quickly righted in future months. If a source of income has been lost, another one needs to be quickly picked up. If there was an emergency, hopefully your finances are in better shape the following month. A notice of missed payments doesn’t mean it’s too late to save your home.

Notice of Intention to Foreclose (Breach Letter)

Different lenders may allow the missed payments to extend for different amounts of time before beginning the next stage of the foreclosure process. But since they can’t file a formal notice of default for at least the first 120 days (in California), a notice of intention to foreclose or a “breach letter” may not come for at least a couple months after you’ve missed a payment. While the tone may be more formal and can sound a bit more threatening, nothing official is happening with this either. A lender may send a number of notices that you’ve missed payments and they intend to foreclose, but these letters don’t mean that it’s too late to pay off the loan.

Notice of Default

A notice of default is the first official step in the formal nonjudicial foreclosure process. When you receive a notice of default, you have exactly 90 days before your home transfers to a trustees sale stage. The notice of default is not impossible to overcome, but it’s the first notice that really means business. If you receive a notice of default it is certainly not too late to save your home—but you probably have about 90 days to do just that.

Notice of Trustees Sale

The notice of trustees sale is the final warning in the nonjudicial foreclosure process. If you receive notice of a trustees sale, you probably have just about 2 weeks to make final payments. If there’s a chance that you can cure the default on your loan, you should be in constant conversation with your lender about the precise timeline.

Judicial Foreclosure

Juducial foreclosures are required in about half of states and can certainly be filed in California as well. You might get 30 days notice in the intent to file foreclosure, along with a breach letter and a summons to a court date. You may have some time to respond to the action or contest it, and you usually get a few more months before a judge has ruled on your particular case.

Of course, judicial foreclosures are usually not set in motion the day that you miss a payment. Most lending companies will wait between 90-180 days before pursuing judicial foreclosure, attempting to exhaust other means of getting the money back. Communication is key during this phase. You may be able to negotiate and work something out with the lender to keep making payments and stay on track. If you’ve missed a payment because of extenuating circumstances but should be able to keep making payments in future months, you shouldn’t have to go through foreclosure.