Home Foreclosures Set to Rise in California
California, one of the states hardest hit by the foreclosure crisis, is bracing for even more bad news on the home foreclosures front. According to Wall Street Journal article, Foreclosures Set to Soar in California, there is another wave about to hit. This analysis is based on pre-foreclosure notices sent out in the first quarter of this year. The article states:
Pre-foreclosure notices in the state jumped by 80% in the first quarter of 2009 from the previous quarter, . . . a sign that foreclosures in California will rise sharply in the coming months.
Home Foreclosures on the Rise in CA
What is Preforeclosure?
In short, pre-foreclosure is akin to a grace period. The homeowner in question is notified that they are in default and that they need to take action to bring their mortgage current. However, the lender is either unable or unwilling — at this time — to proceed with formal foreclosure (eg, eviction).
Pre-foreclosure puts homeowners on notice that they are in the beginning stages of formal foreclosure. However, the time period from when formal foreclosure takes place varies from state to state. Some states allow have a grace period of 30 days; others take as long as six months.
Following is a state-by-state list of approximately how long it takes a lender to foreclose on a homeowner.
State-by-State Timetable of How Long It Takes to Begin Formal Foreclosure Procedures
Alabama: 90 days
Alaska: 120 days
Arkansas: 90 days
Arizona: 90 days
California: 120 days
Colorado: 5 months
Connecticut: 6 months
Delaware: 7 months
District of Columbia (DC): 120 days
Florida: 6 months
Georgia: 90 days
Hawaii: 7 months
Idaho: 8 months
Illinois: 7 months
Indiana: 7 months
Iowa: 7 months
Kansas: 120 days
Kentucky: 7 months
Louisiana: 6 months
Maine: 8 months
Maryland: 5 months
Massachusetts: 5 months
Michigan: 90 days
Minnesota: 120 days
Mississippi: 120 days
Missouri: 90 days
Montana: 6 months
Nebraska: 120 days
Nevada: 120 days
New Hampshire: 90 days
New Jersey: 9 months
New Mexico: 5 months
New York: 10 months
North Carolina: 120 days
North Dakota: 120 days
Ohio: 8 months
Oklahoma: 7 months
Oregon: 5 months
Pennsylvania: 8 months
Rhode Island: : 90 days
South Carolina: 6 months
South Dakota: : 120 days
Tennessee: 90 days
Texas: 60 days
Utah: 5 months
Vermont: 9 months
Virginia: : 120 days
Washington: 5 months
West Virginia: 4 months
Wisconsin: 9 months
Wyoming: 90 days
Following are two things to keep in mind regarding these time frames: (i) in this foreclosure crisis, it’s taking lenders longer to foreclosure in most instances; and (ii) the NOD (formal Notice of Default) is commonly filed 3-4 months after a mortgage holder is delinquent. What this means, in essence, is that you add this time to the timeframes listed above.
Final note: There is a teensy, weensy bright spot in this debacle. While home foreclosures may be set to rise, in the majority of cases it takes at least 90 days for formal foreclosure proceedings to begin. This gives homoewners time to get their financial act together or seek help (eg, modifications, refinancing) where possible.
Copyright © 2009: Foreclosure Business News