How long it will take for a bank to order a foreclosure, I'm behind two months. I have a contract for sale.
Question:
Should I be worried? should I make the payments since I'm expecting to close in about two to three weeks?
I appreciate any help.
Answer:
I'd say it isn't likely, but be absolutely certain. Be sure to discuss it with the bank. Typically, they won't start foreclosure action until the 3rd payment is missed, but once that happens, the process can move very quickly.
Typically, foreclosures are very costly for the bank, so if they have a reasonable belief that a payoff is coming soon, they probably don't want to go through with it. However, you have to be careful, because there are a few lenders out there that are known for being hardliners and enforcing everything to the letter of the law. If you can make at least one payment between now and sale, it might make foreclosure less likely. Because it will probably take some time between now and the closing, and you don't want things to progress too far.
By the way, if you owe a lot on the house, the bank would have less incentive to foreclose. On the other hand, if you owe a small amount compared to the value of the property, the bank might find it more financially beneficial to cause you pain. Don't let that happen.
Talk to the bank - don't take anything for granted. You will probably have to pay until the sale goes through then you can pay off the bank entirely.
Talk to the bank immediately!!
If you have a valid contract and it exceeds the outstanding balance they should be happy to give you a pass for a short period of time.
The WORST thing you can do is remain silent hoping that they won't do anything.
The bank has to notify you via certified mail if they intend to foreclose. I would contact the bank and explain that you are working on a deal to sell. Since you are behind in payments, you might offer to pay the interest that's currently due (as a gesture of good-faith). Banks are accountable to Federal and State Regulators for any loan that's past due 90 days. They may not have to report your loan if you bring the interest payments current. If they have to report the loan, then they have to show what steps are being taken to correct the situation (i.e. foreclosure). They may want you to provide proof of a pending sale, like a copy of a tentative offer. They are in the banking business, not the real estate business. Believe me, they would prefer you sell the property and have their loan paid-off rather than go through a foreclosure. If a bank forecloses on a property, they are guaranteed to take a loss.
More Related Questions & Answers...