Let me be honest with you about something. The call I hate the most in this business is when a borrower calls and their voice is shaking, and they say they missed a payment. They might have lost their job. It's possible that medical bills piled up. Their finances may have gone haywire after a divorce. They want to know what their choices are, and they want to know right now. I've gotten that call more times than I can count while working at AmeriSave, and the answer is never easy, but it is important.
It's not just about losing a home when you have to choose between a short sale and a foreclosure. It's about how quickly you can get your money back in order after that. You don't own the property anymore in either case. But the steps, the damage to your credit, the legal protections, and the time it takes to get back on your feet are all very different. These differences can have a big impact on your life for years.
The numbers show that American homeowners are under a lot of stress right now. ATTOM's most recent data shows that in January, 40,534 properties had foreclosure filings. This is the eleventh month in a row that the number of filings has gone up from the same month the year before. Foreclosure starts went up 26% from the year before, and completed foreclosures went up almost 59%. There were 367,460 foreclosure filings in the full year before that, which is a 14% increase. ATTOM's CEO said this shows that the market is continuing to return to normal after years of historically low activity. These aren't just numbers on a chart. Every one of those filings shows a family having to make a choice that is impossible.
The economic forces behind these numbers are real. In the last five years, property insurance premiums have gone up by about 70%. During the pandemic-era price run, property tax assessments followed home values up. The job market has also gotten weaker since the highs of the post-pandemic period. At the same time, homeowners with adjustable-rate mortgages have to deal with payment resets at much higher interest rates. Those who want to refinance to lower payments are finding it hard to do so because of current rates. This guide goes over both choices in detail so that you can make the right choice with all the information you need.
A short sale happens when you sell your home for less than the remaining mortgage balance and your lender agrees to accept the sale proceeds as satisfaction of the debt, either fully or partially. The word “short” refers to the shortfall between what you owe and what the property sells for. If you owe $300,000 but the home’s current market value is $250,000, your lender would need to agree to accept that $250,000 and deal with the $50,000 deficiency through forgiveness, negotiation, or potential collection.
The most important characteristic of a short sale is that it’s voluntary. You initiate the process. You work with your lender. You select a real estate agent, list the property, evaluate offers, and participate in reaching a resolution. You are not being acted upon. You are acting. That distinction matters enormously, both financially and psychologically.
The first step is to show your lender that you are having trouble paying your bills. You will need to show proof of your financial situation, such as pay stubs or unemployment records, bank statements showing that you don't have enough money to keep making payments, relevant medical bills, divorce decrees if you have them, and a detailed hardship letter explaining what changed in your finances and why you can't keep up with the current mortgage. The hardship letter is very important because you are trying to show that selling short is the best option for everyone, even the lender.
After looking over the hardship package, your lender decides if a short sale is a better financial option than going through foreclosure. They're figuring out how much money they could lose in each case and picking the one that would hurt the least. Depending on the lender's processes, this stage of approval can take anywhere from a few weeks to a few months. The National Association of REALTORS® says that inconsistent processes, lost paperwork, and unrealistic property valuations are still common complaints, but the experience has gotten better because of efforts to standardize the industry.
You put the property up for sale at its fair market value after the lender agrees to the short sale. Your agent sends the lender the offer and a full sales package for final review when they get an offer. The lender decides if the offer price is fair or if they think they could get more money by foreclosing on the property. This stage of the review process can last anywhere from 30 days to several months, and the buyer is basically in limbo during that time. If the lender agrees, the closing goes ahead like a normal sale, but there is more paperwork to deal with the deficiency balance.
It usually takes four to twelve months for a short sale to go from start to finish. One good thing about the longer timeline is that you usually stay in the house without making mortgage payments, which gives you time to save for a rental deposit, plan your next living situation, and start getting your finances back in order.
I want to be honest about something that financial guides tend to skip over. A short sale means actively marketing and selling a home knowing you will walk away with nothing from the transaction. You’re staging the house, scheduling showings, reviewing offers, and negotiating terms on a property that represents years of mortgage payments, memories, and stability, all while coming to terms with the fact that homeownership is ending. It is exhausting. It feels like failure even when it’s the smartest financial move available to you.
But borrowers who choose short sales consistently report feeling more in control than those who go through foreclosure. They are making decisions, solving problems, and acting on their own behalf rather than waiting for a legal process to act on them. That sense of agency matters enormously for emotional recovery.
The gap between what you owe and what the home sells for is called the deficiency balance, and what happens to it depends on your state’s laws and the terms you negotiate with your lender. In some states, lenders can pursue a deficiency judgment requiring you to repay the difference. Other states have anti-deficiency statutes that prohibit lenders from collecting the shortfall under certain conditions. And in many cases, lenders agree to forgive the deficiency entirely as part of the short sale agreement. Your goal should be full deficiency forgiveness in writing before you proceed. Verbal commitments from a corporate loss mitigation department carry no legal weight.
Even forgiven debt can create a tax obligation. The IRS may treat the forgiven amount as taxable income, and you could receive a 1099-C form for the cancelled debt. There are exceptions, including insolvency provisions where your total debts exceeded your total assets at the time of forgiveness, but the rules are complex and situation-specific. Consult a tax professional before completing any short sale to understand your potential liability.
Foreclosure is the legal process through which your lender takes ownership of your property after you stop making mortgage payments. Unlike a short sale, you do not initiate foreclosure. The lender does. You have minimal control over the timeline, the sale method, the price, or when you must vacate. The lender is driving this process, and you are a participant only in the sense that you receive notices and have certain legal rights depending on your state.
Federal law requires lenders to wait at least 120 days after you become delinquent before initiating formal foreclosure proceedings. During that initial window, the lender must make reasonable efforts to contact you and discuss alternatives including loan modification, repayment plans, and forbearance. This pre-foreclosure period is your best opportunity to explore solutions before the legal machinery starts moving, and many borrowers waste it by ignoring their lender’s communications out of fear or shame. That’s a mistake. The calls you avoid now are the options you lose later.
How foreclosure works depends heavily on where you live. In judicial foreclosure states, including Florida, Illinois, New York, New Jersey, Pennsylvania, and Ohio, the lender must file a lawsuit, serve you legal papers, and obtain a court order before selling your property. These proceedings can stretch from several months to several years. Louisiana has the longest average foreclosure timeline in the country at over 3,500 days, and New York routinely exceeds 1,000 days from first missed payment to auction.
In non-judicial foreclosure states, including California, Texas, Arizona, Georgia, and Colorado, lenders can foreclose without court involvement as long as they follow the procedures outlined in your mortgage or deed of trust. This accelerates the process considerably. Texas foreclosures can complete in as little as 60 to 90 days after the first notice, and many non-judicial states finish the process within 120 to 180 days. Understanding which type applies in your state is essential for planning your timeline.
If you miss a payment, you'll get more and more urgent notices asking for payment in the first one to three months. These dunning letters get more and more angry, and your lender is legally required to get in touch with you and talk about options other than foreclosure during this time. A lot of borrowers don't respond to these messages because they are scared or ashamed. That's the worst choice you could make. You lose an option every time you don't answer the phone.
Around the 90 to 120 day mark, your lender usually sends a Notice of Default in states that have courts or a Notice of Trustee Sale in states that don't. This filing is the official start of foreclosure and will be kept on file in your county. People who live near you can see it. People who want to hire you can find it by doing a background check. From now on, you won't be able to keep your privacy.
The time it takes from the first filing to the auction can be very different depending on your state, your lender's backlog, and whether you fight the case. During this time, you keep getting legal notices, court hearings happen in judicial states, your credit score gets worse every month you're late, and the stress of not knowing what's going to happen takes over your life. Some homeowners try to get their loans changed or sell their homes quickly during this time, which is possible but much harder than if they had done it before the formal filing.
AmeriSave wants homeowners who are even thinking about missing a payment to get in touch right away. Before a foreclosure filing, there are a lot more options than there are after it, and the most important thing that affects the outcome is getting help early.
Your home is eventually sold, typically at auction. The lender is most commonly the winning bidder, converting the property to REO status and eventually reselling it through standard channels. If the auction price falls short of your loan balance plus accumulated fees, you may face a deficiency judgment depending on state law. If the price exceeds what you owed, you’re theoretically entitled to the surplus, but this scenario is rare because most foreclosure sales produce below-market proceeds.
After the sale, you must vacate, typically within 30 to 90 days. If you remain, the new owner can initiate formal eviction proceedings. Some lenders offer “cash for keys” arrangements paying $1,000 to $3,000 for prompt departure and leaving the property in reasonable condition, which saves them the cost of eviction and property cleanup.
This is the part that people don't talk about enough, and it's where the difference between a short sale and a foreclosure becomes very clear.
A short sale usually lowers your credit score by 100 to 160 points, depending on your starting score and overall credit history. Borrowers with higher starting scores see bigger drops in their scores because they have more room to fall. The damage depends on a number of things, such as how the lender reports the transaction (as "settled," "paid for less than full balance," or "charged off"), whether you were late on payments before the sale, and how well you kept up with other credit obligations during the process. Credit scoring models give the most weight to the last 24 months. If you keep up good financial habits after the short sale, your score can start to go up in a big way in two to three years.
Foreclosure causes more serious and long-lasting damage, usually lowering scores by 200 to 300 points or more. According to FICO, a borrower with a score of 780 could see their score drop to about 620, while someone with a score of 720 could see their score drop to 570. The damage gets worse because foreclosures almost always happen after months of missed payments, each of which adds a separate bad mark. A foreclosure on your credit report shows future lenders, landlords, and possible employers that you failed to pay your biggest bill. There is a real stigma, and even though it gets weaker over time, it stays with you in ways that a short sale does not.
Both events stay on your credit report for seven years after the first time you missed a payment that led to the outcome. But credit reporting isn't just a matter of mechanics. A short sale, even though it was bad, shows that you saw the problem and did something about it. A foreclosure shows that you either couldn't or didn't use the solution. When future lenders look at your application and decide whether to give you credit, that difference in quality will matter.
After a short sale, the first two years are critical. If you maintain perfect payment history on all remaining credit obligations and keep utilization low, you can expect to recover 50 to 80% of the score drop within two to three years. Secured credit cards and credit-builder loans can accelerate the process. By year three to four, conventional mortgage eligibility becomes possible, though you may face higher interest rates and larger down payment requirements initially. At the seven-year mark, the short sale falls off your report entirely.
After foreclosure, recovery is slower and harder. The first two years show minimal improvement because the event is too recent for most scoring models to substantially discount. By year three, FHA eligibility becomes technically available with extenuating circumstances documentation and credit counseling completion. Conventional mortgage access typically requires the full seven-year wait, though some lenders consider applications after four to five years with exceptional compensating factors. AmeriSave works with borrowers at every stage of credit recovery and can help you understand exactly where you stand and how far you are from mortgage eligibility.
Credit damage from either event extends well beyond your ability to get a new mortgage. Many landlords and property management companies view foreclosures far more negatively than short sales when screening rental applicants. Some have blanket policies rejecting anyone with a foreclosure within the past five to seven years. Short sales, while still negative, are judged less harshly because they demonstrate proactive resolution. Employment background checks in fields like finance, law enforcement, and government contracting can flag foreclosure as a public record event. Insurance premiums, auto loan rates, and credit card terms all worsen with lower credit scores. The ripple effects touch nearly every financial relationship you have.
This is where the rubber meets the road, and this is where the choice between a short sale and a foreclosure will have the biggest long-term effects.
If you have documented extenuating circumstances like losing your job involuntarily, getting sick, or getting divorced, you may be able to get an FHA loan again in as little as two to three years after a short sale. Three years is the normal waiting time for an FHA loan. Veterans with strong extenuating circumstances and a good credit recovery may be able to get VA loans in as little as two years. Fannie Mae guidelines say that most people who want a conventional loan have to wait four years. However, some borrowers with very good reasons can get financing sooner. There is a standard three-year waiting period for USDA loans. AmeriSave sells FHA, VA, conventional, and USDA products. Our team often helps people who are rebuilding after a short sale find the quickest way back to homeownership.
The timelines get a lot longer after foreclosure. To get an FHA loan, you have to wait at least three years after the foreclosure is over. You also need to show that you have been through extenuating circumstances, completed credit counseling, and haven't missed any payments since the foreclosure. It takes at least two years to get a VA loan, but most lenders want three or more. Standard Fannie Mae guidelines say that conventional loans have a seven-year waiting period. However, some lenders will look at applications after four to five years if there are big reasons to do so, such as a large down payment, full credit recovery, and a stable income. You need to have been in the US for at least three years to get a
There is a big difference in practice. AmeriSave could give a homeowner who does a short sale today an FHA loan in two to three years. If a homeowner goes through foreclosure today, they will have to wait three to seven years before they can get a regular loan. In a housing market where prices keep going up, those extra years of renting instead of building equity cost a lot more than just hurting your credit score.
Lenders reference extenuating circumstances as a basis for shortened waiting periods, but the term has specific requirements. Accepted events include involuntary job loss due to downsizing or company closure, serious illness or injury creating significant medical expenses, death of a primary wage earner, divorce or legal separation, and natural disasters affecting your property or income. Documentation must demonstrate that the circumstances were beyond your control, directly caused your inability to pay, and that you have since recovered financially and maintained good credit on all other obligations. Simply stating that you lost your job is insufficient. You need employment records, unemployment documentation, and evidence of subsequent stable reemployment.
Control is the most important thing that sets them apart. You still have a lot of control during a short sale. You pick your real estate agent, decide whether to accept offers, negotiate terms with buyers, and play an active role in reaching a resolution. You are in charge of the process, but your lender has the final say. The lender is in charge of everything in a foreclosure. You don't get to choose how, when, or how much to sell. You get notices, but you have little say in what happens. That loss of control makes the emotional stress worse and makes many homeowners feel stuck in limbo.
The timeline is very different. Short sales can take anywhere from four to twelve months from the start to the end, which gives you more time to plan and usually means you don't have to make mortgage payments. In fast non-judicial states like Texas, foreclosures can happen in as little as three months. In slow judicial states like New York and Louisiana, they can take three years or more. You can't fully move on with your life during the foreclosure timeline because you don't know what will happen.
The condition of the property is different in ways that affect everyone. During the short sale process, the homeowner usually lives in and takes care of the property. This means that buyers get a property that is in good shape and can inspect it and negotiate repairs. When a property is foreclosed on, it often stays empty for a long time, which raises the risk of vandalism, neglecting maintenance, and deterioration. Usually, they are sold as-is and there is no room for negotiation on repairs.
A lot of people don't realize how important public records are. Your credit report will show a short sale, but public foreclosure databases and courthouse records usually won't. To someone who isn't paying close attention, the deal looks like a normal home sale. A foreclosure is made public in your county, shows up in foreclosure databases, and can show up in background checks for jobs, professional licenses, and security clearances.
Handling deficiency balances gives short sale borrowers a big edge in negotiations. You can negotiate deficiency forgiveness as part of a short sale, and many lenders agree because they would rather not spend more money on a foreclosure that might not bring in as much money. State law and the lender's willingness to pursue collection decide deficiency judgments after foreclosure, and you have much less power to negotiate.
Both short sales and foreclosures can trigger tax liability on forgiven debt. If your lender cancels a deficiency balance, the IRS may treat that amount as taxable income. You could receive a 1099-C form and owe taxes on money you never received. The Mortgage Forgiveness Debt Relief Act provided significant protections for homeowners, but its provisions have changed over time and do not apply in every situation. The insolvency exception, where your total liabilities exceeded your total assets at the time of cancellation, may shield you from the tax hit, but proving insolvency requires detailed financial documentation. In either scenario, consulting a tax professional before completing the transaction is essential because an unexpected tax bill on top of losing your home creates a compounding financial hardship that can derail your recovery.
One practical benefit shared by both paths is that you are typically not making mortgage payments during the process, which frees up cash for immediate needs like rental deposits, moving expenses, and emergency savings. In a short sale lasting four to twelve months, that represents significant savings you can redirect toward stabilizing your housing situation. During foreclosure, especially in slow judicial states, you may remain in the home for a year or more without payments. However, the uncertainty of the foreclosure timeline makes financial planning harder because you do not know when you will need to vacate. Short sales carry no direct legal fees for the homeowner because the lender absorbs the sale costs. Foreclosure may involve legal expenses if you contest proceedings or hire an attorney to negotiate on your behalf. AmeriSave recommends that homeowners use the payment-free period strategically, saving aggressively for the transition rather than treating it as found money.
Knowing what is causing the rise in foreclosures can help put things in perspective and may help homeowners who are in trouble feel less ashamed. This isn't a problem of being careless. It's a reaction to economic pressures that many homeowners couldn't have seen coming when they bought their homes.
ATTOM's report at the end of the year said that 367,460 properties had foreclosure filings last year. This was 14% more than the year before and 3% more than the year before that. The report for January continued the trend with 40,534 filings, which was 32% more than the same month the year before. There were 26,369 new foreclosures, which is a 26% increase from last year. The number of completed foreclosures rose by an amazing 59% from January of the previous year to 4,714. Delaware, Nevada, and Florida had the highest rates of foreclosures in the country. Florida, Texas, and California had the most foreclosures starting.
Several converging factors are driving these increases. In the past five years, property insurance costs have gone up by about 70%. In some high-risk states, premiums have even doubled or tripled, which adds hundreds of dollars to housing costs every month that borrowers never expected. Property tax assessments went up after home values shot up during the pandemic, which led to escrow shortfalls that made monthly payments go up. People who have adjustable-rate mortgages have to deal with payment resets at rates that are much higher than what they agreed to at first. The job market has gotten weaker since the pandemic ended, and ATTOM's CEO has said that the recent slowdown in hiring is making more people miss payments.
The end of pandemic-era foreclosure moratoriums and forbearance programs also has something to do with it. During the pandemic, federal and state protections kept foreclosure rates at all-time lows. When those protections ran out, distressed properties started to come onto the market. The current rises are partly due to the backlog that has been building up in the system. Even though the number of foreclosures is going up, it is still much lower than it was before the pandemic and much lower than the peak of 2.87 million filings during the Great Recession, which was 0.26% of all housing units compared to 2.23% at the peak. The data suggests that things are getting back to normal rather than getting worse, but that doesn't help the homeowner who is falling behind. AmeriSave keeps a close eye on these market trends because knowing what's going on in the bigger picture helps our team give borrowers realistic advice about their options based on current lending conditions.
Short sales are best when you have time to finish them, which means that the foreclosure process hasn't gone too far yet. You need to be able to actively help gather documents, work with agents, and talk to your lender. If you want to protect your credit for the future, like when you apply for a mortgage, a rental, or a job in a field that checks credit, a short sale can help. If your lender is willing to work with you and you can negotiate deficiency forgiveness, it will save you a lot of money. The AmeriSave team can help you figure out your timeline and whether a short sale is still possible based on where you are in the process of being behind on your payments.
If you wait too long and the process is already well underway, if health problems or emotional stress keep you from actively participating in a short sale, if the property won't sell because of its condition or the market's limitations, or if you're in a judicial foreclosure state and need as much time as possible in the home to stabilize your living situation, foreclosure may be the only option. In states where deficiency judgments aren't allowed on your type of mortgage, the damage to your credit from foreclosure may be worth it if you don't have many assets to protect.
Before committing to a short sale or letting foreclosure proceed, exhaust every alternative that might preserve your homeownership entirely.
Loan modification is often the first option to explore. Your lender may agree to reduce your interest rate, extend the loan term, or add missed payments to the loan balance to bring your account current. Many borrowers qualify for modification programs they never knew existed simply because they never asked. If you’re facing financial hardship, your servicer can explore modification options that make monthly payments sustainable again. Forbearance offers temporary payment suspension or reduction while you recover from a short-term setback like job loss or medical emergency. Repayment plans allow you to catch up on missed payments gradually by adding extra amounts to your regular payment over several months.
Refinancing may be an option if you have sufficient equity and can qualify on income. A rate-and-term refinance through AmeriSave can reduce monthly payments, and for homeowners with significant equity, a cash-out refinance can consolidate high-interest debt and lower overall monthly obligations. If your local rental market supports it, renting out the property while you find more affordable housing can bridge a temporary income gap and keep you from losing the home entirely. A deed in lieu of foreclosure, where you voluntarily transfer the property deed to the lender in exchange for release from the mortgage, avoids formal foreclosure proceedings but still carries significant credit impact. And if you have any equity at all, even a small amount, selling at market value avoids both short sale and foreclosure entirely.
The homeowners who recover fastest are the ones who act early. Not gonna lie, I’ve watched too many borrowers wait until they’re eight months behind before picking up the phone. By then, options have narrowed and the clock is working against them. If you think you might miss a payment, contact your lender immediately, not after you’re already months in the hole.
I tell all of my borrowers who are in this situation that they are not failures because they can't keep their house. Things that happen in life, like losing a job, having a medical emergency, or getting a divorce, are not signs of a bad character. Things happen, and how you handle them is what shows how good you are with money, not if you have trouble.
In most cases where you can't keep your home anymore, a short sale is the best way to get back on your feet. It protects more of your credit, speeds up the process of buying a home, gives you control over the process, and shows future lenders that you took care of the problem before it got worse. It takes time, work, and emotional strength, but the long-term benefits of not going through foreclosure are huge.
Foreclosure should not be the first choice. If it becomes necessary, learn about your state's process and timeline, your rights when it comes to deficiency judgments, and start making plans for your recovery right away. Every day, people start over after losing their homes. They rent, fix their credit, save, and then buy again.
You have good questions about all of this, and you should be able to trust the answers you get. AmeriSave's team helps people with all kinds of financial problems, from first-time home buyers to homeowners who are having trouble. The first step in the conversation is to figure out where you are and plan the best way to move forward. Losing your home is just one part of your story. It doesn't have to be the end of everything.
A short sale usually takes four to twelve months from start to finish. The timeline includes gathering proof of hardship, which takes two to four weeks, getting the lender's approval for the short sale process, which takes one to three months, listing the property and finding a qualified buyer, which takes one to four months, and then waiting for the lender to approve the buyer's offer, which takes another one to four months. Some lenders have simple processes, while others are known for taking a long time to respond and asking for the same documents over and over. The longer timeline is good for you because you usually stay in the house without paying your mortgage during the process. This gives you time to save for your next housing situation. Before you go through with a short sale, get in touch with your servicer to find out about your options.
Yes, but the time you have to wait is very different. After a short sale, FHA eligibility can come back in two to three years if there are documented extenuating circumstances. For veterans, VA loans may be available in two years. For everyone else, conventional loans usually require a four-year wait. FHA loans require at least three years after foreclosure, VA loans require two to three years in practice, and conventional loans have a standard waiting period of seven years. During the waiting period, work on rebuilding your credit by keeping your payment history perfect on all of your remaining debts, keeping your credit utilization low, and saving money for emergencies. AmeriSave's prequalification process can help you figure out where you stand without hurting your credit score when you're ready to look into buying a home again.
Lenders don't have to approve short sales; they look at each request on its own. They look at the expected short sale proceeds and compare them to what they would probably get back through foreclosure after taking into account legal fees, property maintenance costs, and market conditions. If you have a lot of proof of your financial problems, a property valuation that backs up the sale price, and proof that the home's market value is higher than your mortgage balance, your chances go up. When you work with a real estate agent who is good at negotiating short sales, your chances of getting approved go up a lot because they know what each lender needs and how to put together submissions that work. AmeriSave can help you learn about your mortgage options.
The deficiency balance, which is the difference between what you owed and what the home sold for, is handled differently in each state and depending on the terms you agreed to with your lender. The lender may completely forgive the deficiency as part of the short sale approval in some cases. In some cases, the lender may seek a deficiency judgment that requires payment. Some states don't allow deficiency judgments at all under certain circumstances. Before you finish the sale, your top priority in negotiations should be to get full deficiency forgiveness in writing. The IRS may treat forgiven debt as taxable income, which means you may still have to pay taxes on it. However, there are some exceptions, such as insolvency provisions. Before you make your choice, talk to a tax expert and look into your options for refinancing at amerisave.com/loan/refinance.
Foreclosure makes it very hard to apply for rental properties. Many landlords and property management companies automatically turn down applicants who have had a foreclosure in the last five to seven years during credit screening. The foreclosure is also listed in public county records that some landlords look at directly. People usually look at short sales less harshly because they show that the seller is trying to solve the problem instead of being forced to leave. If you need to rent after a foreclosure, be ready to be honest about your situation, show proof that you are financially stable now, offer bigger security deposits, and think about going to private landlords instead of big management companies that have strict screening rules. The Resource Center at AmeriSave has tools to help you rebuild your financial profile.
Even after formal proceedings start, foreclosure can still be stopped or delayed. However, your options get smaller as the process goes on. In the beginning, you might be able to get the loan back by making up missed payments, getting a loan modification that makes payments easier to handle, setting up a forbearance agreement for temporary relief, or filing for bankruptcy, which stops foreclosure proceedings right away. If you act quickly and have buyers who are interested, a short sale may still be possible even after you file. Some states have redemption periods that let you get the property back after the auction by paying the full amount owed. Speed is the most important thing. When you realize you might fall behind, call your lender right away, not after months of silence. Visit amerisave.com to look at your options.
In states like Florida, New York, Illinois, and New Jersey, the lender has to file a lawsuit and get a court order before they can sell your property. This is called judicial foreclosure. These cases usually take twelve to thirty-six months or longer, which gives you more time but also keeps you in the dark for longer. Non-judicial foreclosure is used in states like Texas, California, Arizona, and Georgia. It follows the steps laid out in your mortgage or deed of trust without going to court. This can shorten the process to as little as three to six months. Judicial foreclosure gives you more formal legal protections and chances to defend yourself in court. Non-judicial foreclosure, on the other hand, moves faster and has fewer procedural differences. Your state decides which type applies, and it's important to know how long it will take so you can plan. To learn more about your options, go to AmeriSave's home loan resources.
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