Before a foreclosure can begin, a lender must deliver a default notice to the borrower. If the borrower does not pay the full amount in default plus interest and fees within 30 days, the lender may start the foreclosure process by filing the appropriate documents in court. The lender also notifies the borrower of the foreclosure action. If there is no opposition by the borrower to the court action, there will be no hearing. If the borrower opposes the foreclosure, the case could go to trial.
If the court rules in favor of the foreclosing lender, the borrower has at least 90 days to keep the property and stop the foreclosure proceedings by paying all amounts due. Including these 90 days, the pre-foreclosure period usually lasts 6-7 months.
Notice of Sale /Auction
If the borrower does not stop the foreclosure during the pre-foreclosure period, the lender publishes a notice of sale for three weeks in a local newspaper. The sale is scheduled 30-45 days after the first publication date. The notice must contain the property description and the date, time, and location of the sale.
The sale is often at the office of the foreclosure attorney, who also runs the sale. Sales may also take place at the courthouse or the property. The sale may be postponed for no more than seven days at a time and the postponement will be announced at the originally scheduled sale. At the sale, the lender may bid on the property. The property is sold to the highest bidder. Usually bidders are required to bring a certain deposit amount (stipulated in the notice of sale) and may pay off the balance within 30 days. After the sale and payment of the balance, the lender transfers the property ownership to the winning bidder.