How soon can my bank begin a foreclosure on my home?

Financial challenges happen for everyone from time to time, and errors occur in keeping bills or posting payments to accounts. Most people would like to think that simply missing a single mortgage payment — for whatever reason — will not cause a default or the start of foreclosure proceedings. According to information published by the City of El Paso, that may not be the case.

When a bank can institute foreclosure proceedings depends on the language including in the lien note that was signed when you originally purchased or financed the home. With the exception of specialty loans insured by the VA or FHA, most loan documents provide the bank with the ability to begin foreclosure proceedings after the homeowner defaults on the loan by missing a single payment.

The City of El Paso does point out that most lenders don’t initiate foreclosures immediately upon a first payment missed. Mail can be lost, homeowners can run a few days late, and people can simply forget to make a payment due to stresses and a busy life. In most cases, banks make an effort to reach out to homeowners to bring accounts current before going through with default paperwork. If efforts to bring the account current are not answered by the homeowner, then a lender will usually begin foreclosure proceedings.

The exception to this rule is FHA- or VA-backed loans. In these cases, foreclosure proceedings cannot begin until a homeowner is three or more payments past due.

Getting behind on mortgage payments can be a frightening experience, and it’s a quick slope from missing a first payment to the beginning of foreclosure proceedings. Because mortgages often account for a large expense, it’s more difficult to catch up after missing one or two payments. Understanding legal options for dealing with foreclosures is one way people can fight to keep their homes in such situations.

Source: The City of El Paso, “Foreclosure Under Deed of Trust” Oct. 24, 2014