Understanding the foreclosure process in Idaho is an important part of navigating your own home foreclosure. As if the process isn’t intimidating and confusing enough, the laws and procedures vary from state to state.
What is foreclosure in General?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in Idaho works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
Common Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial or non-judicial. In Idaho, lenders can use both types of foreclosure, but usually use non-judicial foreclosure. Judicial foreclosure is most common in Idaho when dealing with larger tracts of land, over 40 acres. However, the majority of single family home foreclosures that affect the average home owner are non-judicial. This is good news for the lender, not so good news for you.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Non-Judicial Foreclosure (most common in Idaho):
- The mortgage lender serves you with papers demanding payment, called a Notice of Default, or NOD for short. This notice will also be filed with the county recorders office.
- After or at the same time as the Notice of Default, the lender has to mail you a Notice of Sale. Alternatively, the lender can serve the notice in person. If no adult is available to receive the notice, it may be posted. No other notice is required. The Notice of Sale must be delivered at least 120 days before the sale.
- The trustee can then sell your property to the lender at a public auction. If you have not vacated the property, the new owner has the right to evict you.
- If the foreclosure sale is for less money than you owe the bank, the difference is called a “deficiency balance.” The lender can, and most likely will, then sue the borrower for a deficiency judgement up to the amount of the difference between the foreclosure sale and the fair market value of the property at the time of the sale. You are not off “Scot-free.” Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
- In Idaho, there is no Right of Redemption after a non-judicial foreclosure. This means that once the foreclosure sale is done, there is no way for you to get your home back.
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Should I Do If I’m Facing Foreclosure?
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Brady Buys Houses to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Idaho, we can help you.
We buy houses in Idaho like yours from people who need to sell fast.
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Another Foreclosure Resource For Idaho HomeOwners: