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The answer to this question will depend on your home state. Some states are judicial foreclosure states, some states are nonjudicial foreclosure states, and some states like Maryland are quasi-judicial foreclosure states.
Judicial Foreclosure: Delaware, Pennsylvania, In a judicial foreclosure state, the lender will file a complaint seeking the money judgment and mortgage foreclosure. It is like a traditional trial. The homeowner has an opportunity to file an answer to the complaint and claim any potential defenses.
Most of these cases are resolved by the entry of a default judgment (if the homeowner does not respond) or summary judgment (if the homeowner files an answer but has no valid defense to foreclosure). Once the lender has judgment they need to list it to the sheriff to set up a sale. A sheriff’s sale is usually held in a large public room in the sheriff’s office. That process can take about six to ten months from start to finish.
Some states require a lead time before the lender can actually file a complaint. Pennsylvania requires giving the lender 33 days. In states like Delaware, the lender actually has to conduct a mandatory mediation in order to give the homeowner a chance to negotiate a loan modification. Arbitration can add 60 days or more to the process. This time is added to the six to ten months that will last before a homeowner loses the right to reside in the home by default.
Nonjudicial Foreclosure: Virginia, In a nonjudicial foreclosure state, such as Virginia, foreclosures and evictions can happen very quickly because the courts are not involved in the process. Many mortgages in Virginia require lenders to give homeowners 30-day notice and the right to cure before starting the process. Failing a cure, and depending on the language in the mortgage or deed of trust document, the creditor may schedule a foreclosure sale and conduct the sale two, three or four weeks after it is published in the local newspaper. A commissioner reviews the sale and expenses and a deed can be transferred approximately thirty days after the sale.
Quasi-Judicial Foreclosure: Maryland, Maryland has more complicated rules. A lender cannot file a complaint (called an order to docket) before (a) 90 days after the default or (b) 45 days after it is sent to the homeowner. Notice of Intent to Foreclose, The lender must wait 45 days after serving the Order to Docket on the homeowner (if the lender cannot serve the homeowner after two separate date attempts, the lender may post the Order to Docket on the home). may). Like Delaware there is an opportunity for arbitration in Maryland, but unlike Delaware the process is not mandatory; If the lender does not agree, the homeowner must ask to stay the foreclosure sale to allow mediation to proceed.
Under certain timelines, up to 270 days must pass before a Maryland foreclosure can actually occur, and even then a court must confirm the sale, the buyer needs to compromise and, if the landlord refuses to leave, , then get a court order to evict the homeowner from the home. It should come as no surprise that in Maryland, homeowners can stay in a home for a year or more by default.
A homeowner in all of these jurisdictions can file a Chapter 13 bankruptcy case to stop the foreclosure sale and try to cure the defaults over 60 months so they can keep their home. Many people file bankruptcy on the eve of the foreclosure sale so that they can maximize the time they can stay in their home if the bankruptcy ultimately fails.
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