Foreclosure is a legal process that allows a mortgage lender to reclaim a property when the borrower stops making payments. The property is then sold to recoup the unpaid balance on the loan. This process varies by state and may follow either a judicial (court-supervised) or non-judicial (out-of-court) path, depending on how the mortgage agreement is structured.

According to the Consumer Financial Protection Bureau (CFPB), federal regulations prevent servicers from starting foreclosure until a homeowner is over 120 days late on their mortgage. This waiting period is crucial — it provides time to explore solutions before the process becomes harder to reverse.

How the Foreclosure Process Works

The process begins when you’ve missed several monthly payments. Your servicer (the company managing your mortgage) is required to reach out and offer loss mitigation options such as loan modifications or repayment plans. Depending on your state, the foreclosure may require court approval or follow a streamlined process without it.

Most importantly, you’re not without options — and the earlier you act, the better your chances of avoiding foreclosure.

How to Avoid Foreclosure

• Reach Out Early: Contact your mortgage servicer as soon as you anticipate trouble making payments. Waiting increases the risk of losing your home.
• Work with a HUD-Approved Housing Counselor: These professionals offer free guidance and can help you negotiate with your lender. Find help at consumerfinance.gov/mortgagehelp.
• Beware of Scams: Avoid anyone asking for upfront fees or “guaranteed” results. Legitimate support is always free.
• Understand Your Options: Loan modification, forbearance, repayment plans, short sale, or deed-in-lieu of foreclosure are all potential alternatives. Ask your servicer which ones apply to your situation.

The Role of the CFPB

The Consumer Financial Protection Bureau (CFPB) has implemented rules to protect homeowners. These include prompt outreach from your servicer after missed payments, accurate information about your options, and access to staff who can guide you through the process.

You're Not Alone

Many homeowners feel overwhelmed when facing foreclosure — especially those dealing with job loss, divorce, or unexpected health issues. But you don’t have to navigate this alone. You can regain control, rebuild trust in the process, and find clarity by taking proactive steps today.

Team Reyes Real Estate is committed to walking homeowners through even the most difficult chapters with empathy and expertise. Whether you inherited a home with unresolved debt or are simply unsure what your next step should be — we’re here to help, not pressure.

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Source: Consumer Financial Protection Bureau. “Foreclosure Avoidance Procedures.” Read the full CFPB publication

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