Foreclosure Timeline

The following table provides an overview of the process from the time of the late charge notice to the foreclosure sale date. Please note that this is based on no contact/no loss mitigation with the borrower and is considered the earliest a loan would be foreclosed on. These requirements and timeframes are governed by the Insurer/Guarantor, Deed of Trust, Code of Virginia and Federal Law.

  Action
1 A late charge notice is issued on the 17th day of delinquency. Collections and various other letters are sent between the 18th and the 37th day. On chronic accounts, collections begin as early as the 10th day of delinquency.
2 Around the 37th day of delinquency, a HUD I and or a breach letter is issued.
  • The HUD 1 letter provides (7) business days for the borrower to respond. The HUD brochure is sent at this time also.
  • The breach letter provides a 30 day reinstatement period.
3 If the borrower cannot be reached, calls and "no contact" letters will continue from the 38th day to the 61st day
4 At 62 days delinquent, at (3) payments past due the loan is assigned to a loss mitigation queue for a possible work out. Over the next 10 days aggressive efforts are made to contact the borrower.
5 When the loan is 72 days delinquent and there is no contact with the borrower, the loan is recommended for foreclosure and referred to an attorney to commence foreclosure.
6 Once the attorney opens the file, it takes approximately 45 days to arrive at a foreclosure sale date. During the 45 days, the attorney will simultaneously do the following:
  • Examine title
  • Comply with Federal Fair Collections Debt Act by sending out a 30 day notice providing the borrower with a final warning of the foreclosure and a copy of ads placed in the newspaper. (Generally most Deeds of Trust ((DOT)) require ads to run for once a week for 2 consecutive weeks. Some DOT’s require one ad for 4 weeks. In the newspaper ad, The Code of Virginia only requires Trustee’s to provide a 14 day notice; however, most trustees allow a 30 day timeframe.) The 30 day notice is also sent to Junior lien holders, Homeowner Associations and the IRS. This time also allows the borrower to appeal the debt.
  • In Virginia, in cases where the loan has been identified as a "Subprime" loan, the lender/attorney must provide an additional 30 day period in addition to the approximately 45 days if the customer contacts them for a work-out. This may mean that the foreclosure sale would need to be cancelled for a 30 day period to allow the servicer to make a decision or determine if a work-out is possible.
  • On the day of the foreclosure sale, loans are approximately 117 days delinquent (4 months) or 147 days if the loan falls under the "Subprime" definition.