1. Lender initiates foreclosure: The lender files a lawsuit against the homeowner in court, also known as lis pendens, alleging default on the mortgage payments. This typically occurs between three months and twelve months after the last payment.
2. Service of legal documents: The homeowner, any occupants, any judgment creditors with a common name, and any secondary mortgages are served with a summons and complaint, informing them of the foreclosure lawsuit. The summons and complaint are attached with the Lis pendens.
3. Homeowner response: The homeowner or any interested parties have a limited time to respond to the lawsuit, typically around 21 days.
4. The bank and the homeowner, through the courts and a petition letter, may mediate to try and work out payment arrangements for the mortgage.
5. The bank submits paperwork to request a referee be appointed to compute amounts owed and eventually handle the foreclosure sale.
6. The bank must submit all costs to date so the referee can compute the amount owed to the bank for inclusion in the final default judgment.
7. Default judgment: If the homeowner fails to respond with an answer, the lender can seek a default judgment from the court. If the homeowner submits an answer, it will delay the process.
8. Judgment of foreclosure and sale: The court issues a judgment allowing the property to be auctioned off to satisfy the debt.
9. The referee sets up a foreclosure date, which often gets adjourned.
10. The property is auctioned off to the highest bidder at a public sale, typically held at the local Town Hall.
11. If the bank is owed more than the property's worth, they may take back the property unless they discount at the sale. Sometimes an investor will purchase the property.
12. After an investor puts a down payment and enters into a contract with the referee at the auction, they usually close between 30 and 90 days. The investor must serve a 90-day notice to the occupant to vacate the premises. After they close on the property.
13. If the bank repossesses the property, they may send a realtor to negotiate cash for keys, which may take anywhere from one month to up to two years before the realtor shows up . Sometimes they start the eviction right away.
14. If the homeowner does not vacate voluntarily, the new owner will initiate the eviction process after the 90-day notice to vacate has elapsed. Legal assistance from pro bono services may be available for the eviction defense.
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