A mortgage lender can use a process called foreclosure to take a property from a homeowner that defaults on the loan. The foreclosure process can take anywhere from one to seven months, depending on the state you live in. By filing bankruptcy, all legal actions against you, including foreclosures will be stopped.
A lender can legally begin the foreclosure process after your first missed payment, although they generally don’t. You will usually get a friendly reminder that you have missed a mortgage payment with probably a late fee attached.
If you miss a second payment, your friendly reminder maybe a little less friendly and a little more formal. The third missed payment will bring more phone calls and threats of legal action.
In most states, the first step a lender takes is to file a notice of deficiency with the court. The homeowner will receive a copy of this notice letting them know how much to bring the mortgage current and how much time they have to do so. Three months is typical of this time frame.
Selling the Home
If the homeowner does not catch up on the payments, a date will be set to sell the home. The homeowner has five days before the sale date to bring the loan current. If the mortgage is not paid, the property will be sold to the highest bidder, and they will receive the deed to that property.
If you are facing foreclosure contact a Houston bankruptcy attorney to find out how you can save your home.