These redemption periods vary by state law. During the redemption period, if you're able to find enough money to pay off your mortgage balance, you can pay off the balance and your home will be returned to you. The former homeowners remain responsible for this debt.Īfter a foreclosure sale, there is a brief redemption period. With few bidders, the homes are rarely sold for fair market value, increasing the amount of the deficiency even further. In some nonjudicial foreclosure states, the foreclosure notice is only required to give the date of the sale and say the time of foreclosure is "during the legal hours of sale." In at least one state that allows this practice, the legal hours of sale are any time between 11:00 AM and 4:00 PM.
It's common for people passing by to have no clue what's going on. The only bidder may be a representative of the mortgage company. A court clerk may come out and call for bids. Get Started with Upsolve What Is a Deficiency Judgment?įoreclosure sales are often conducted by auction on the courthouse steps. A nonjudicial foreclosure process may require as little as a homeowner missing a few months of your mortgage payments and a law firm running three weeks of advertisements of the foreclosure sale in the legal notices of a local newspaper for the mortgage company to begin the foreclosure process. It's much quicker since the mortgage company doesn't need to file a lawsuit before beginning the foreclosure process. Nonjudicial ForeclosureĪ nonjudicial foreclosure is the more common type of foreclosure. Because of the backlog in many courts due to COVID-19, you can expect these procedures to take even longer. As a result, a judicial foreclosure process can take two years or longer to complete. Navigating a lawsuit, judgment, and a sale takes time. With a judicial foreclosure, the mortgage company must go to court and get a judge's permission before they begin foreclosing on your real property. Some states prohibit deficiency judgments on real estate that was the debtor’s primary residence. Some states bar a mortgage company from seeking a deficiency judgment unless they use a judicial foreclosure. In a nonjudicial approach, the mortgage company will have to file a separate lawsuit to obtain a deficiency judgment. If the mortgage company pursues a non-judicial foreclosure, it will likely progress quicker than a judicial foreclosure would. A creditor can obtain a deficiency judgment during the judicial foreclosure process. If so, the foreclosure process will take longer, but it will be easier to defend against this action as a result.
It may be the case that the mortgage company pursues a judicial foreclosure.
The type of foreclosure your mortgage company uses will impact you in a number of ways. If the mortgage is a recourse loan, the court may then grant the creditor a deficiency judgment, and the creditor can then sue you to recover the remaining debt. If the foreclosure sale price isn't enough to pay off the outstanding mortgage debt, a deficiency balance will remain. When a creditor forecloses on your home, it will be sold at auction. What Does a Mortgage Company Do With a Deficiency Judgment?.Can I Avoid a Deficiency Balance if My Home Is Foreclosed?.
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