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How many missed payments before foreclosure can start?

On Behalf of | Feb 27, 2022 | Real Estate Law

When borrowers miss payments on commercial or residential loans, lenders have the ability to foreclose on the property. This essentially means that they reclaim the property and they will attempt to sell it to make up what they can from the loan.

One thing that both sides may be wondering is just how many missed payments are required. If a borrower is a day late with a payment, does that count as a missed payment and could foreclosure technically start? What if they miss the payment entirely? Or do they have to miss multiple months in a row?

The borrower has to miss repeated payments

As you likely suspected, one missed payment generally isn’t enough to start foreclosure, and a late payment certainly is not. The borrower has to miss repeated payments in order for the lender to reclaim the property. A good rule of thumb is that four missed payments are necessary.

It’s also important to note that foreclosure isn’t instantaneous. Even after those missed payments, it can take months for the whole process to play out, and there are specific deadlines that both sides need to be aware of. Notices need to be given at certain times, and the borrower may even consider something like bankruptcy to extend the process further through the use of an automatic stay.

Overall, foreclosure is a fairly complicated and long process, not something that happens quickly or without warning. It’s very important for all involved to know about their legal rights, the deadlines they have and the steps that they’ll need to take