Lenders usually aren't eager to take your house back, and they're not chomping at the bit to begin foreclosure proceedings as soon as they possibly can. They want you to pay your mortgage – they don’t want ownership of your home, and they don't want to go through the time and cost that foreclosure proceedings involve. If you miss one mortgage payment, you probably have time to fix the situation, but the foreclosure process can vary a little from state to state.
In most cases, your lender does have the legal right to begin foreclosure proceedings if you fall 30 days behind or miss one payment. This language is typically included in the mortgage you signed when you took the loan. As a practical matter, however, this rarely happens. You may be able to miss as many as three payments before foreclosure proceedings begin.
If you miss a mortgage payment, and particularly if you miss more than one, your lender will contact you, either by phone, mail, or both. If you don't respond, you may have another 30 days before your lender gets serious about the situation. You'll receive written notice that it plans to foreclose. What happens next – and how quickly it happens – depends on where you live. About half of all states are judicial foreclosure jurisdictions. The other half allow for non-judicial foreclosures, and some states have hybrid laws where they recognize both processes.
Judicial foreclosures take the longest. After you receive notice from your lender that it's going to take action, it must file a lawsuit against you seeking a court's permission to do so. By law, you must receive a copy of the lawsuit documents, then you must have time to respond. This entire process can take a month or two, then a hearing is scheduled. Even if the lender receives court permission at the hearing, it usually can't foreclose immediately. Some states require that lenders send another notice, telling when it will auction the property for purchase by another buyer. All told, this can all take an additional three months or more after you receive notice that your lender is going to foreclose.
In non-judicial states, your lender can skip the court proceedings and go directly to foreclosure, but you'll still have a little time – just not as much as if the lender had to file a lawsuit. After you receive notice of the foreclosure, some non-judicial states require that your lender publish notice in a newspaper as well, and this process can take as many as four weeks. The sale of your home might occur two weeks after the last publication. Non-judicial foreclosures differ the most by state law, and in some jurisdictions, notice might be posted at the courthouse rather than in a newspaper.
Depending on why you missed a mortgage payment, foreclosure doesn't have to be inevitable. If you contact your lender immediately when it first inquires about your missed payment – or if you let your lender know even before you miss a payment that you're probably going to – most banks will work with you. You might be able to modify your mortgage to make the payments more manageable, or enter into a forbearance plan to catch up any missed payments if you can make your next ones on time. In a worst case scenario, if you can't catch up or afford even modified loan payments, you might be able to negotiate a short sale where the lender allows you to sell your home for less than you owe.
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.