Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
My in laws haven't paid their mortgage since July 2014. They have yet to receive their 6 month redemption period letter, so this process will for sure be over 2 years. Seems really long. How long is typical? I'm in Minnesota if it matters.
The process and it's length varies greatly from state-to-state. I'm not sure if we have any RE professionals who post here from Minnesota. You might want to try to cross post in the Minnesota forum to see if you get better answers.
I am not surprised in the least. I have seen a vacant home in my area (Florida) that took almost 10 years for the bank to finally foreclose on. There are many factors involved that can delay the process.
My in laws haven't paid their mortgage since July 2014. They have yet to receive their 6 month redemption period letter, so this process will for sure be over 2 years. Seems really long. How long is typical? I'm in Minnesota if it matters.
Trying to predict the time on when the lender chooses to foreclose, really depends on the value. If the property is underwater, there is no incentive for the lender to foreclose. The could be more profitable for the bank to let the home owner remain in the home to maintain it.
The primary method of foreclosure in Minnesota involves what is known as non-judicial foreclosure. This type of foreclosure does not involve court action but requires notice commonly called foreclosure by advertisement. Prior to initiating a foreclosure the attorney conducting the foreclosure must obtain and file a power of attorney indicating the foreclosure will be pending. The lender through the attorney must then publish a notice of foreclosure sale date for six (6) weeks in a newspaper of general circulation in the county in which the property is located.
Notice of foreclosure as described above must be served on all occupants/owners of the property being foreclosed upon at least four (4) weeks prior to the foreclosure sale. Homestead properties require eight (8) weeks notice before sale.
The sheriff will auction the property to the highest bidder including the lender. Sales usually occur between 8AM and sundown. The foreclosure sale may be postponed by the sheriff by posting a notice of postponement at the same location the sale was originally going to occur at.
In Minnesota, the lenders can also go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. This process is called foreclosure by action. The property is then sold as part of a publicly noticed sale by the sheriff. A complaint is filed in court along with what is known a lispendens. A lispendens is a recorded document that provides public notice that the property is being foreclosed upon.
Depending on the timing of the various required notices, it usually takes approximately 60-90 days to effectuate an uncontested non-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and adjournments of sales, or files for bankruptcy.
Minnesota has a statutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs within six (6) months after the sale. The redemption period is twelve (12) months if the amount due as of the date of the filing of the notice of foreclosure sale is less than 2/3 of the original principal amount of the loan and the property exceeds 10 acres or the property exceeds 40 acres. Mortgages executed after December 31, 1989 may have the redemption period shortened by court order to five weeks if the property has been abandoned. An affidavit of costs and expenses must be filed ten (10) days before the redemption period ends or these may not be recoverable.
A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. Deficiency judgments are limited to the fair market value of the property less the unpaid balance of the loan that was foreclosed.
One of the primary reasons the foreclosure process takes so long, & sometimes stalls out almost completely, is partially because of the change in Mark to Market accounting rules:
In 2009 the Treasury department eased the accounting rules for banks so that they weren't forced to write down the diminished value of their defaulted assets to current market values, at least until they actually sold the properties.
The government was concerned the whole banking system would fail under the weight of all the bad mortgages.
Its the same thing if you owned a bad stock that you paid too much for. You don't write it off until you actually sell it.
The Mark to Market accounting rule change essentially allows the banks to choose when & where they want to take their losses, & how fast they have to enter them in their books, which affects their year end balance sheets, which in turn determines how much $ reserves they have to carry.
Face it: we all have to live by the Golden Rule: Ye who has the Gold, Rules!
In my state, they can legally foreclose 120 days (4 months) after posting the door and starting the clock. Rarely do they happen that fast, though. Usually there are several reschedulings. I've seen them take 3 years a few times after the clock starts. But usually they go after about a year. Totally depends on the bank though, and whether the seller tries to do a short sale, and whether the seller files bankruptcy in the middle of the process, and a dozen other things.
Really, really depends on the state. In Georgia, a foreclosure can happen pretty quickly, partly because Georgia is a non-judicial foreclosure state, and partly because the title remains in the hands of the lender, through a security deed. There are some stringent notification clauses, but it usually takes 60-90 days for a non-contested non-judicial foreclosure. Modification Specialist had an excellent response above.
Really, really depends on the state. In Georgia, a foreclosure can happen pretty quickly, partly because Georgia is a non-judicial foreclosure state, and partly because the title remains in the hands of the lender, through a security deed. There are some stringent notification clauses, but it usually takes 60-90 days for a non-contested non-judicial foreclosure. Modification Specialist had an excellent response above.
Thanks for the comments......
Dito - on "it depends on the state".
Out of all the states I've modified mortgages, Georgia has the shortest time to foreclose.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
...
