A customer who doesn't start talking to the servicer to figure out a way to make up the missed payment faces further problems. After 45 days to 60 days from the original payment date, the servicer will issue what's called a demand or breach letter. The letter warns the consumer that something has to be worked out or the house will be referred to foreclosure. If another 30 days pass with no resolution, the formal foreclosure process begins. The process At this point, the steps involved vary widely depending on which state the borrower calls home.
Some states have a judicial foreclosure process.
Servicers operating in these states hire local attorneys who file court documents, attend foreclosure hearings and otherwise manage the cases. In other states, the process doesn't involve the courts as much. Lender representatives are required to record foreclosure notices at the local courthouse and publish details about borrower debts in the local newspaper. In the end, a foreclosure sale or auction is held on the borrower's property, at the local courthouse or in some other nearby location. The time involved in this stage of the process varies widely, too.