This is second blog on foreclosure. After learning what foreclosure is about last week, What is Foreclosure?, we discuss the sequence of events in the foreclosure process along a timeline. Those facing foreclosure understand how serious a matter it is. To ensure the homeowner is given due process, a timeline identifies the length of time the homeowner has to respond to the lender’s claim that the homeowner is in default on the mortgage loan.
Each state determines the number of days allowed between each of the significant markers in the process: delivery of the notice; filing of the foreclosure complaint; filing for a summary judgment; scheduling of the Sheriff’s sale; the Sheriff’s sale; sale confirmation and the eviction from the home. The timeline for Ohio is below. It is very important for the borrower to open all mail. The borrower needs to keep up to date on how the foreclosure process is moving along and meet all the deadlines. If the borrower has been ignoring their mail because they don’t want to face the issue, they may miss important deadlines and lose their home faster.
The Legal Aid Society of Columbus has made a three-part-video series on foreclosures. The first in the series, available on YouTube, explains the “rules” of foreclosure. This video is titled Understanding Foreclosure Part 1: Essential Tips. The 17 minute video discusses and shows you a timeline so you can follow along.
At day 1
The homeowner is delinquent the first day the mortgage payment is late. If you know in advance you are not going to be able to make a full mortgage payment on time, contact your lender and begin discussions to deal with the situation. This also would be a good time to contact the Ohio Housing Finance Agency (OHFA) at 888-404-4674. They will let you know who in your county is a HUD Approved Housing Counseling agency to start working with you. Each agency referred by OHFA has received good reports from previous homeowners who worked with them; don’t delay. The Consumer Finance Protection Bureau produced a good resource about protections for homeowners facing foreclosure: Rules establish strong protection for homeowners facing foreclosure(PDF).
Day 16 to day 34
Late fees are added to your already overdue mortgage bill. Each lending institution determines the amount of the late fee.
By day 35 a live contact has been made with the homeowner by the servicer of the mortgage (this may be the bank or credit union who sold the mortgage to the homeowner, or it could be another company whose job is to collect the payments and take care of the loan). A live contact means they can speak to you on the phone but not just leave a message.
By day 45 you receive a written notice from the servicer of your mortgage. This notice must include a telephone number of the designated person assigned to you by the servicer and the mailing address of the servicer. You need this address to ensure documents you send to the servicer reach them. Don’t send copies of documents to the original lender you worked with – they won’t get to the right place! Included in this notice may be information for the borrower about loss mitigation options. Loss mitigation involves a third party that works with the borrower and the mortgage servicer towards preventing the foreclosure. A modification (referred to sometimes as a “mod”) to your mortgage might be negotiated that decreases the interest rate of the mortgage or lengthens the term of the mortgage (the length of time to repay the full mortgage amount). Information about obtaining a loss mitigation application may also be in the notice. Information to contact local housing counselors should also be included. If the borrow completes an application for loss mitigation, the application MUST be completed in full. Incomplete applications are not acted on.
If the borrower declines a loss mitigation application, accurate information must be given to the borrower about the appeal process. Records of the borrower’s account and payment history must be provided to the borrower and be complete and accurate. Any document previously submitted to the servicer by the borrower for loss mitigation also needs to be duplicated and provided to the borrower. Contacting a local HUD approved housing counselor helps the borrower know their rights and responsibilities. Through day 119, there can be no written notice of foreclosure. This shows the importance of working with OHFA and a counselor to begin mitigation or start the appeal process.
Only after day 120 can the servicer refer the loan to its foreclosure department and hire a local attorney or other firm to initiate foreclosure procedures. The borrower must be notified of filing within 45 to 60 days.
Day 165 to day 415 the house will be sold at a foreclosure sale; Sheriff Sale – public auction. In Ohio, even after the sale has happened, the homeowner has at least 30 days to redeem the property. This means they can make the mortgage current and pay all late fees and foreclosure fees incurred by the servicer in order to reclaim the home.
Sources:
National Consumer Law Center, (2013). Guide to surviving debt. Boston: MA.
Save the Dream Ohio Quarterly Training, (2014).
