During the foreclosure process, the lender must file a number of documents before your house can be taken away. When you face foreclosure, it is critical to know what documents to expect so you can gauge how much time you have before you lose your house to a foreclosure auction.
Notice of Default
The first document you are likely to receive when a foreclosure is looming is the notice of default. Lenders file a notice of default with the county clerk's office to notify you that you are in default. You should receive a copy of this notice at your home, and it should be posted in the public records. At this point, the lender is letting you know that you have not made your mortgage payment and have defaulted on the mortgage agreement.
Notice of Acceleration
You also may receive a notice of acceleration, which tells you the lender is accelerating the payment schedule of your mortgage. Instead of allowing you to make payments every month for the next several years, you have to pay off the entire mortgage balance at once. Lenders can take this action based on the acceleration clause in your mortgage documents that you signed when you took out the loan.
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Notice of Sale
The notice of sale is another document that will be filed and sent to you. When you receive this notice, it alerts you that the lender intends to seize and sell your property. In states that use non-judicial foreclosure, this could be the first document you receive. In these states, the lender does not have to file a notice of default or do anything else. Once you miss a few payments, lender in these states can move to foreclose and sell immediately.
In some cases, you may receive a deficiency notice from your lender. This document indicates that the lender still expects you to pay the balance that remains after the foreclosure. For example, if the foreclosure auction does not bring in enough money to pay off the debt owed, the lender may come after you for the rest. This can only happen in states that allow recourse mortgages, and, at that point, the lender could sue you for the balance.