When you’re unable to make a mortgage payment, you may have fear of losing your home. A foreclosure doesn’t happen instantly. There’s a process that lenders must go through to sell your home.
Missing a payment
A missed payment is the first step of the foreclosure process. However, this doesn’t necessarily mean you’re going to lose your home. If you contact your lender before missing a mortgage payment, they are usually willing to accept a late payment. Always try to negotiate in advance of a missed payment because it gives you more peace of mind and could prevent the lender from initiating a formal foreclosure. If you have already missed one or more payments, still contact your lender as soon as possible. You may be able to work it out with them.
Notice of default
California law requires that lenders send a 30-day notice when they are going to start the foreclosure process. They can then officially start the process by mailing a notice of default (NOD) through certified mail. By law, they usually have to give you at least three months to cure the default and reinstate your mortgage.
End of the cure period
At the end of the period allotted for you to cure the default, your lender can schedule the foreclosure of your home. Before the period ends, you should attempt to negotiate a deal as soon as possible if you’re unable to catch up on payments on time. You could receive free foreclosure counseling from U.S. Department of Housing and Urban
Development (HUD) certified housing counselors for additional assistance.
Notice of sale
If the cure period ends without you curing the default, then the state puts a notice of sale sign on your home. Notice of the foreclosure sale will also appear in a newspaper of general circulation in your city.
The actual foreclosure sale is the last stage of the foreclosure process. Lenders accept the sale proceeds as payment in full.
The foreclosure process in California offers you several opportunities to prevent foreclosure by working out a payment plan with the lender. You should take action to stop a foreclosure as soon as possible because lenders are more likely to negotiate early on.