How long is the Foreclosure process

Question

Hi all! I have a question about foreclosures. How long does it typically take a house to be listed on the market once a foreclosure deed is recorded? Is there a pretty standard time periods or does it all just vary?

For reference I am in alabama and the foreclosure feed was recorded December 2019. It was just listed on hubzu for auction last month but no one bid on the home. I’ve been trying to get information on the home to see when it will go to market but I have had no luck.

Mike S. · Answer

Redemption period for mortgages(homestead) prior to January 1, 2016 is one year, after January 1, 2016 is 6 months. You can make improvements and if redeemed, redeemer would have to pay those costs paid for improvement.

Denise Evans · Answer

@Morgan Granger, for mortgages executed on or after January 1, 2016 and for which a homestead exemption was claimed claimed during the tax year of the foreclosure, the redemption time period is 180 days. All others it is 1 year. If the property notices were not given, the 180-day redemption time period can be extended to one year.

Aside from issues related to the particular property foreclosed, lenders have differing needs that translate to different time periods before listing on MLS. Typically, a local or regional lender will offer properties for sale more quickly than a securitized trust or large national lender.  For larger lenders, the real estate must be booked into the ORE department and a new appraisal ordered by that department. The pre-foreclosure appraisal will not be sufficient.  A management company must be hired to secure the property and note the presence of any occupants. The property might be flagged for auction, or bulk sale to 3rd party investors. It can all take a lot of time.

Greg H. · Answer

Most of the foreclosures listed on Hubzu are CWCOT properties or the like.  The bank is basically attempting to sell the property at a higher price to minimize their losses before collecting on the mortgage insurance and selling the property to HUD, VA or FNMA.  The process could take a month or a year as there is no standard

Max Versteppen · Answer

The length of the entire foreclosure process depends on state law and other factors, including whether negotiations are taking place between the lender and the borrower in an effort to stop the foreclosure. Overall, completing the foreclosure process can take from 6 months to more than a year.

Logan Hassinger · Answer

@Mike S.

Yes, you’re correct I was quoting the tax deed redemption. Sorry for the confusion. We have a few things going on in AL at the moment lol.

Andy Mirza · Answer

@Morgan Granger Large institutions have processes that they follow once they foreclose on a property and there's no hurrying them up. It takes months or years for them to get through all of the tasks they need to complete before a real estate agent lists the property.

One of the things that take the most time is title. Title needs to be clear before they'll list the property. We avoid buying non performing notes in Alabama because of borrowers' post sale redemption rights. I'm not sure how banks handle that and suspect that the process might take longer because of that.

Morgan Granger · Answer

@Denise Evans it was bought in December (I guess that is when the bank acquired it) then it was listed feb of 2020 and they kept dropping the price and just removed the listing the 7th of this month (I just missed it) and went to auction for a couple of days and no one bid on it. I just assumed since it was listed maybe they would put it back on the market sooner than later since they’ve already tried that once. Or if anything, I could find someone at the bank to talk to to make an offer

Morgan Granger · Answer

@Denise Evans okay thanks you. I might have to read that a few times to grasp it. Also one of the odd things I noticed under the history of the property is it seems that it was listed for sale a month ago and then the listing was removed and then it was put on the hubzu auction site. Is that normal or why would they list it for a couple of month then remove it to auction?

Logan Hassinger · Answer

@Morgan Granger

As Andy mentioned, Alabama has a redemption period of 3 years. What that means is that the borrower has 3 years to come back to the bank and pay the debt owed and all costs and they get the property back. If you were to buy it within the redemption period, the borrower Has the legal right to buy it back from you. You wouldn’t be able to renovate the property or place a tenant or move in until the redemption is over.

Typically we offer a deed in lieu and also get a waiver of redemption signed by the borrower to avoid this.

Morgan Granger · Answer

@Jakob Kegel from what I’ve seen on the mls the bank took over possession already and it’s a big bank. I guess I just have to play the waiting game.

How long is the Foreclosure process

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