Have You Received One of These Foreclosure Notices?

If you’ve received a foreclosure notice from your lender – chances are – you’re panicking. 

Foreclosure notices are scary. They are usually multiple pages long and have sentences in all capital letters. Sometimes, they get taped to your door or aggressively mailed to you several times.

The first thing to understand about foreclosure notices is that they will be different depending on what state you live in and what type of foreclosure you have:

• A non-judicial foreclosure occurs outside the court system through a series of foreclosure notices issued by a foreclosure Trustee. The number of notices and the time frames between them are dedicated by your state’s laws. After receiving the requisite number of foreclosure notices, there will be a public auction of the home. 
• A judicial foreclosure occurs within the court system. After missing payments, your bank will record a Lis Pendens (a formal notice of a pending legal action). At the conclusion of the legal action, your bank will receive a court order to foreclose on the home and hold the public auction. 

If you are in a state that mostly execute non-judicial foreclosures, you can expect to receive these types of notices: 

Acceleration Notices

These are foreclosure notices sent by your lender, from your lender (on lender letterhead) during the pre-foreclosure phase of the foreclosure process. 

The purpose of these notices are to tell you that you are in default, that the lender is taking the matter seriously, and that you are on your way toward foreclosure. 

Common phrases you will see within these letters are:

• Intent to accelerate the debt
• Notifying you that you are in default
• Acceleration Notice
• Past Due Notice
• Mortgage Past Due 

The earliest you could start receiving these letters is shortly after you miss your first payment once the grace period for you to make up your first payment has expired. 

Notice of Pre-Foreclosure Options (NOPO)

In Washington State, the lender will send you a foreclosure notice called a NOPO. 

This notice will say IMPORTANT RIGHTS FOR HOMEOWNERS at the top and will have information about retaining an attorney or a HUD housing counselor to help you. 

In Washington, the NOPO gives you a right to a meet and confer meeting which you should take advantage of if you are intending to try and avoid foreclosure. 

Notice of Default

The Notice of Default is typically sent to you by a foreclosure Trustee (a party hired by your lender to handle the foreclosure in your state). You can identify this notice because it will be sent from a company or law firm that is not your lender, sent on behalf of your lender. 

In Washington, this notice may give you the right to attend a foreclosure mediation to stop the foreclosure and negotiate with your lender. 

This notice does not set a public auction date against the property but if you do nothing and the issue does not get resolved, you can expect to receive the next (and final) notice (The Notice of Trustee’s Sale) 30-days after you receive this one. 

Notice of Trustee’s Sale

The Notice of Trustee’s Sale will typically be the final notice you will receive before the home is sold at a public auction. This is usually a publicly recorded document. 

The timeframe for how long you have between this notice and the auction differs amongst the states. In Washington, you have 120-days between this notice and the public auction. 

If you’re intending to resolve the issue and have not done anything yet, you need to take action as soon as you receive this notice because are likely very close to a foreclosure auction of your property. 

You can still file for mediation in the state of Washington but only for 20-days after this notice is recorded against you. 

Eviction Notice

If you do nothing to prevent your foreclosure and the home gets sold at a public auction (or reverts back to the bank), you need to vacate the property within the timeframe allotted to you by your state. In Washington, you have 20-days to vacate the property. 

If you do not vacate the home, at some point, you will receive an eviction notice. This is not good and can impact your ability to rent future homes. Do everything you can to avoid an eviction notice. 

If you are in a state that mostly execute judicial foreclosures, you can expect to receive these types of notices: 

Acceleration Notices

Prior to a judicial foreclosure action, you will also receive acceleration notices from your lender as they try to collect your missed payment(s).

These are notices sent by your lender, from your lender (on lender letterhead) during the pre-foreclosure phase before they have taken active steps to foreclose on the property. The purpose of these notices are to indicate to you that you are in default, that the lender is taking the matter seriously and that you are on the way toward foreclosure. 

Common phrases you will see within these letters are:

• Intent to accelerate the debt
• Notifying you that you are in default
• Acceleration Notice
• Past Due Notice
• Mortgage Past Due 

The earliest you could start receiving these letters is shortly after you miss your first payment once the grace period for you to make up your first payment has expired. 

Default Letter or Notice of Intent to Foreclose Letter

You may receive a formal letter that is called a default letter outlining everything you owe to bring the mortgage current. 

This letter will tell how to reinstate your mortgage and it may advise you to seek counsel or help from a HUD counselor or attorney. 

Summons and Complaint 

Per judicial foreclosure procedure, if nothing gets resolved – you will be formally sued by your bank. The documents you will receive at the outset of the lawsuit are called a summons and complaint. These get formally served to you and to all parties that the mortgage lender believes would be defendants in the lawsuit against you. 

Typical defendants in a judicial foreclosure would be:

• The borrower on the mortgage (you)
• Occupants of the home (sometimes)
• Other lien holders or creditors who have a judgment against the property

The complaint will give you information about your mortgage and your promissory note, how much you owe, when you stopped paying and what the lender wants. 

It will ask the court to provide the mortgage lender with a judgment that will allow the lender to get a court order to foreclose on the home through a sheriff’s sale of the property (a public auction).

If you have received a summons and complaint, you should reach out to an attorney immediately. 

Just because you’ve received a foreclosure notice it doesn’t mean it’s too late to try and resolve the matter with your bank

• You can use the loan modification process to help you achieve a mortgage modification so you can resume mortgage payments and keep your home. An approved and accepted loan modification will stop your foreclosure. If you have a Fannie Mae, Freddie Mac, FHA, VA, or USDA loan, there may be government programs to help you achieve a mortgage modification (to keep the home).  
• You can request forbearance on your mortgage loan. If approved for forbearance, your mortgage servicer will temporarily stop requiring monthly mortgage payments for an agreed upon time.
• You can complete a reinstatement of the past due amounts in order to bring your loan current and keep the home. A reinstatement is a one-time payment in full of all your missed mortgage payments and any related fees. After you reinstate, you then resume your normal monthly mortgage payment. 
• You can work out a new repayment plan with your bank or mortgage servicer to catch up on mortgage payments and keep the home. A repayment plan allows you to resume your regular mortgage payments with an agreed-upon extra amount on top of your regular payment that goes toward the arrears. Once your repayment plan is done, you continue with regular mortgage payments. 
• If you want to short sell your home or deed it back to the bank (because you owe more than the home is worth), there are ways to apply and negotiate approval for a Deed in Lieu or a Short Sale Agreement with your lender. These agreements will help you stop foreclosure and get out of your home before the auction date.  

You may also want to consider filing a bankruptcy if loss mitigation isn’t a good option for you

A Chapter 7 or a Chapter 13 bankruptcy stops foreclosure actions. Once you file bankruptcy, an ”automatic stay” goes into place which stops the foreclosure. Your mortgage lender can ask the bankruptcy court to lift the stay (by filing a motion) but even if this happens, you will likely still be able to delay foreclosure for 1-2 months using the bankruptcy process.

A Chapter 13 bankruptcy may also help you keep your home long-term by establishing a payment plan that allows you to pay back the missed mortgage payments over a certain amount of time. 

A Chapter 7 bankruptcy doesn’t allow you an opportunity to catch up on mortgage payments or keep the home long-term, so this type of Bankruptcy is mostly beneficial in delaying the foreclosure sale and getting rid of other unsecured debt, not in figuring out a long-term solution. 

If you’re considering filing bankruptcy, the first step is always to have a consultation with a bankruptcy attorney about your particular situation so you get the best advice. 

The best thing you can do is to not ignore the foreclosure notice that you’ve received

Many homeowners feel overwhelmed by the foreclosure process (rightly so) and don’t feel like they can deal with the issue. 

If you have missed mortgage payments and are receiving notices, consult with a foreclosure defense or mortgage relief attorney in your area as soon as possible. 

The more foreclosure notices you receive and farther along the foreclosure timeline gets, it becomes harder and harder to work something out with your bank. You can help yourself by ensuring that at the first sign of a scary foreclosure notice (or even before that if possible!) you talk to someone who can help you. 

If you’re a homeowner in Washington state and have started receiving foreclosure notices, please feel free to reach out for a free consultation at (425) 654-1674.