Answers To Basic Foreclosure Questions and A Brief Chart Summarizing Foreclosure Process In All 50 States
This is a series of blog entries in which we provide some quick answers to lenders' frequently asked questions (FAQ).
In any workout of distressed commercial real estate, ultimately the focus narrows in on the process and timing of foreclosure. The answer varies state to state. Here are two questions, answers and a very brief resource that might guide you in this process.
FAQ #22 - When and where do I proceed with foreclosure?
- The process differs in every state, but generally a non-judicial foreclosure begins with sending the borrower a formal “notice” of default, typically followed by posting notices of sale by newspaper and other means over a specified period of time.
- A judicial foreclosure may also have required notices, and involves filing a lawsuit to initiate the process. If the borrower and the lender are located in different states, it might be possible that federal diversity jurisdiction is present, and you may file suit in federal court, rather than local state courts to avoid possible "hometown" bias in favor of the borrower.
FAQ #23 - How long will the foreclosure process take?
- It depends on whether you are proceeding by non-judicial or judicial foreclosure, and varies from state to state.
- Generally, non-judicial foreclosure can be accomplished within a matter of a few weeks to a few months.
- Judicial foreclosure typically has all of the delays to be expected in other types of lawsuits, from initial service of process to discovery, to delays inherent in court calendars.
DANGER: Here is a very, very brief overview of the foreclosure process in all 50 states. PLEASE contact a lawyer BEFORE you actually rely upon this chart. In these "changing" times, is it imperative that you only pursue foreclosure following counsel and advice of local counsel.
To read the entire Tough Times FAQ series, please click here.
Two things should be kept in mind. First, none of these questions can be answered in a vacuum. Questions should be considered with a thorough review of the file and an interview with appropriate loan officers. And secondly, many of the questions are worth revisiting from time to time because subsequent events will impact the answers.
If you have thoughts, suggestions or questions on this topic, please post a comment below.
