During the housing crisis of the early 2000s, foreclosure numbers were at a record high. Thankfully, the market has since turned around, but that doesn’t mean foreclosures are necessarily a thing of the past. In 2018, there were over 600,000 reported foreclosure filings in the U.S. alone, according to ATTOM Data Solutions, a real estate research company.
Whether or not you’ve gone through a foreclosure before, the process can be emotionally and logistically difficult. There’s the financial stress, the challenge of finding somewhere to live, the logistics of moving your things, and the ordeal of planning for the future.
With so much going on, it’s important to know what to expect. But unfortunately, foreclosure laws and practices can be confusing. This is partly because the laws differ by situation and by location.
“States have all kinds of different foreclosure rules,” says Bryan Zuetel, a real estate attorney and real estate broker in California’s Orange County. “The process will depend on each state’s foreclosure laws.”
Still, one thing homeowners faced with foreclosure need to know is how long they have before move-out day. Here’s how long you can expect to stay in your house when it’s in foreclosure.
Beginning of the foreclosure process
First things first: Know that a homeowner isn’t automatically in foreclosure at the first sight of a late bill.
Yes, a borrower is considered “delinquent” as soon as a mortgage payment is late. But, being late on a deadline doesn’t necessarily mean you’re headed for foreclosure.
Once the borrower misses a payment, federal law states that the lender must wait 120 days before starting foreclosure proceedings.
During this time, you might be able to strike a deal with the lender and change your payment plan.
“The bank does not want to take back a home and almost always loses money when they do,” says Rick Davis, a real estate attorney in Olathe, KS. “Therefore, they will often work with borrowers to find solutions that allow the money to be repaid while the borrower keeps ownership of the home.
If an agreement isn’t reached, though, the lender can start proceedings after those 120 days.
When do you have to move out?
If eviction isn’t part of the foreclosure, you’ll probably be able to live in the house until the lender finishes the foreclosure process and sells the home.
“Usually, people will leave the home when the foreclosure is completed and they are no longer the owner,” says Zuetel, but there’s no exact rule on how long this process will take.
In fact, the length of the foreclosure usually depends on a few factors, including state laws, how quickly the lender can move the process along, and what kind of foreclosure it is.
In some states, Davis explains, “the lender can utilize a nonjudicial foreclosure, which means that the property is sold on the courthouse steps without going through court. In these instances, the property may be sold in as little as 30 days.”
But when it comes to judicial foreclosures (foreclosures that go through the courts), it can take months or even years, according to Davis.
Even then, there are some special cases where you wouldn’t have to leave as soon as the house is sold. If your state requires the court to get confirmation on the sale, you may get some extra time.
“Pay careful attention to the notices you receive from the lender or their attorney,” Davis says. “All of the information related to deadlines, court dates, and sale dates will be in these notices.”
Another way you might get to stay put in your home for a little extra time is if your state allows for a redemption period—that is, a period when a foreclosed homeowner can buy back the property.
If you can either reimburse the new buyers for what they paid for the house or repay the mortgage debt, you can redeem the house and take back ownership.
Still, the actual rules of the redemption period vary by state. Because of this, it may be best to contact a local attorney and find out how much time you have. In some states, the redemption period could be as short as a few days, or, says Davis, as much as a year after the sale. But be careful, because you might be required to leave the house before that redemption period is actually over.
Eviction and eviction suits
Even when it seems like you’ve come to the end of the foreclosure period, there may still be some time before you actually need to move out of the house. When you receive an eviction notice, you’ll be told how long you have before you need to be out. Most people get three days’ notice.
If you don’t leave in this time frame, the new owner can file an eviction suit (also known as an unlawful detainer) in court. Proceedings could take weeks, so you could enjoy that extra time in the house, free of charge.
However, while some extra time in the house might sound great, it’s probably better to move out before this happens. If you’re sued for staying past the eviction date, it could hurt your chances of being able to rent or own property in the future. Furthermore, your credit score could be damaged.
No matter what path you go down in the foreclosure process, it’s important to know your options.
“Homeowners faced with foreclosure should consult with an attorney specialized in residential real estate foreclosures,” says Zuetel. If you can stay informed, you just might get through the process a little easier.
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