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Rights of Borrowers in Foreclosures:

Facing foreclosure can be one of the most stressful situations in anyone’s life and can leave you feel vulnerable, unsure about the future and scared about what steps to take in protecting yourself and your family.

Here are some top concerns regarding the right of borrowers:

When can a creditor foreclose on my home?

Upon getting a loan for a home, you usually give the creditor a security interest (usually in a form of a deed to the prperty) so that the creditor can take your property and sell it if you default on that loan(s).

Depending on which state your property resides in, the timeline for when a creditor may foreclose on your property if you do not make repayments can vary from state to state.  Some states will allow foreclosure to happen as soon as 10 days after no payment but usually a mortgage is not considered delinquent till 3 months after payment on the loan have ceased.

Does my creditor need to give notice to foreclose on the property?

Yes, they do.  Most states require a written Notice of Foreclosure usually a month in advance to the actual resale of the foreclosed property.

The borrower can still prevent the foreclosure by repaying the creditor but they will usually have instituted an acceleration clause so that the borrower will have to pay the rest of the mortgage, not just the missed payments, including paying any interest and late penalties owed to the creditor to stop the foreclosure.

What is the process the creditor need to follow to foreclose on the property?

The creditor MUST advertise the property for sale anywhere from a week to over a month before foreclosing the property and provide the following information:

  • Borrower’s name
  • Original amount of the loan and how much is owed
  • Description of the property
  • Creditor’s attorney
  • Time and place of the auction

How does each state handle foreclosures?

Check below to see how they handle foreclosures in your state.

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