Q-How long is a homeowner usually behind in the their payments before a bank will take legal action?

A- The general timeframe is three to six months.  The bank will usually communicate with the homeowner by mail first as they default in their payments.  After a month or two they will send a letter from an attorney followed by the filing of a LP or Lis Pendens.  Lis Pendens mean litigation pending.  This is the first step in a pre-foreclosure law suit.

Q- How long after a case is filed will it be scheduled for sale?

A- Usually three to six months after the filing of the LP the bank’s representative will request a Motion for Final Judgement.  At that time a sale date will be set.

Q- What can stop a foreclosure sale?

A- Contacting the homeowner after the case has been filed, prior to the foreclosure sale affords you the ability to prevent the sale from being scheduled.  If you negotiate a deal with the homeowner prior to the sale that satisfies the bank, the plaintiff’s attorney will file a voluntary dismissmal on behalf of the plaintiff.  That will stop the sale.  Be cautioned to always follow up on paperwork and promises.  The clerk of court must receive the documentation necessary to cancel the sale.  The homeowner can also file a suggestion of bankruptcy prior to the scheduled sale.  This is will stop the sale for that day, although it is not a permanent solution.

Q- Is an LP and a short sale the same thing?

A- No.  A short sale is only necessary when a property is worth less than the balance due on the mortgage.  Short sale and new cases mistakenly became synonymous when, after the “crash” in 2008-09 homes were financially underwater and short sale was the only option.  Now that property values are recovering there is equity in them, no longer requiring a short sale.