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- Home borrower pays the default loan during a grace period, and the home is reinstated to the home borrower.
- Home borrower sells the home to a third party during the grace period. Then home borrower use the money from the sale to pay off the loan to avoid a foreclosure.
- The property is sold to a third party at the end of grace period.
- The creditor takes ownership of the property.
Timeline for foreclosure can be different in each state. By law, the process of foreclosure technically begins when a borrower misses the first payment, but most lenders usually do not begin the process until 3rd payment is missed. Here is an example of foreclosure timeline.
Day 1: Record Notice Of Default
Within 10 Business Days: Notice of default is published.
Within 1 Month: Notice of default is mailed.
After 3 Months: Sale date is set.
25 Days Before Sale Date: Notice of Sale is send to the I.R.S.
14 Days Before Sale Date: Record Notice of Sale.
5 Business Days Before Sale Date: Right to reinstate the loan expire.
Sale Date: Property is sold at the auction.
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