Foreclosure in Idaho

How an Idaho foreclosure works, step by step

1. Generally, the legal foreclosure process can't start until you're at least 120 days behind.
2. The trustee or lender records a notice of default with the county recorder in each county where the home is. It says you've broken the loan terms, how, and that the lender has chosen to sell the home. The trustee must mail it to every person who owns an interest in the home, with a state notice warning you to be cautious of anyone who says they can save your home from foreclosure.
3. If the home is your primary residence and your lender is state or federally regulated, a notice about asking for a loan modification comes with the notice of default. To apply, you return the enclosed form by certified mail, and the lender must receive it within 30 days.
4. After the notice of default is recorded, a notice of sale must be mailed by registered or certified mail at least 120 days before the sale.
5. Someone must try at least three times, on different days over at least seven days, to hand the notice of sale to an adult living in the home, each try at least 30 days before the sale. Each time, a copy is posted where it can be seen on the property, unless an earlier copy is still up. The notice is also printed in a local newspaper once a week for four weeks in a row, with the last one at least 30 days before the sale.
6. The trustee sells the home at auction to the highest bidder, and the lender can bid too. The sale happens between 9 a.m. and 4 p.m., at a place in the county where the home is.
7. The buyer can take possession on the tenth day after the sale. Anyone still living there after that, without an older right, is treated as a tenant at sufferance.
8. Within three months after the sale, the lender can sue you for the balance still owed.

Asking for a loan modification before the sale

Idaho adds a step for owner-occupied homes. When a state or federally regulated lender records a notice of default on your primary residence, it must send a notice telling you how to ask for a loan modification. Your home counts as your primary residence if it has the homeowner's property tax exemption for the year the notice of default is recorded.

If you send the form back in time, the lender must tell you in writing within 45 days whether it approves, denies or needs more information. The trustee's sale can't happen until the lender has responded on time. If you ask for a meeting, the lender must meet you in person or talk with you by phone before it answers your request.

The state notice itself warns you never to pay someone to get you a loan modification, because HUD-certified housing counselors help for free.

Send the form early and keep proof that you mailed it.

Catching up within 115 days

Within 115 days after the notice of default is recorded, you can pay the lender the full amount then due under the loan. That includes the costs of enforcing the loan and a reasonable trustee's fee, but not the part of the principal that wouldn't be due yet if you hadn't fallen behind.

Paying it cures the default, and your loan goes back in force as if it had never been called due.

Ask the lender or trustee for a written figure well before the deadline.

The trustee's sale

Under Idaho law, the trustee holds a power of sale it can use after you break the loan terms. The notice of sale names the date, time and place: between 9 a.m. and 4 p.m., in the county where the home is.

The lender can ask to postpone the sale, but no more than 30 days at a time, and a postponed sale can be postponed again the same way.

How long it takes

Foreclosure generally can't legally start until you're at least 120 days behind. Once it starts, how long you have until the sale depends on your state.

For FHA loans, HUD's time frame runs from the first legal action until the lender has clear title to the home and possession of it. In Idaho, that's 13 months, and the first legal action is recording the notice of default.

Under Idaho law, the notice of sale goes out at least 120 days before the sale, your right to catch up lasts 115 days from the notice of default, and the last newspaper notice runs at least 30 days before the sale.

These are official markers, not a forecast. Your case can move faster or slower, so don't count on extra time.

Shortfall, leftover money and redemption

After a trustee's sale, the lender has three months to sue for the rest of the debt. The court must first find what the home was really worth on the sale date. The judgment can't be more than what you owed minus that fair market value, and it can never be more than what you owed minus the sale price.

Sale money goes first to the costs of the sale, then to the loan, then to later recorded liens. Any surplus goes to the borrower who signed the deed of trust, or to whoever took their place.

Once a trustee's sale is held, the people who got notice of it have no right to redeem the home from the buyer.

A court foreclosure is different. Those sales can be redeemed, like other court-ordered sales. You can redeem within six months after the sale if the land is 20 acres or less, or within one year if it's more.

Rules for deals you sign while in foreclosure

• Under Idaho's Consumer Foreclosure Protection Act, any contract with you during foreclosure that transfers any interest in your home must be in writing, with a state notice in bold type.
• You can cancel any contract about your home that you sign during foreclosure within five business days. No money or interest in the home can change hands until those five days have passed. To cancel, tell every other party in writing. Any wording works as long as it shows you don't want to be bound.
• Licensed mortgage lenders and brokers, banks and credit unions don't have to give this notice.
• A person who breaks these rules can owe penalties and damages.
• The Attorney General warns that some so-called foreclosure rescue companies strip owners of their equity and make them tenants in their own homes.
• Idaho's Department of Finance licenses and regulates mortgage loan modification companies under the Idaho Residential Mortgage Practices Act. Companies that offer foreclosure help aren't allowed to charge you up front. They can charge only after they work out a deal with your lender that you want to accept.

Idaho's notice and cancel rules above touch all five ways I buy: a cash offer, taking over payments, seller financing, a lease option and a novation. And don't stop talking to your lender while you weigh any offer, including mine.

Free help in Idaho

• Idaho Housing and Finance Association: homeowner resources. If you're struggling to pay, it points you to free housing counseling with a HUD-approved counselor.
• Idaho Court Assistance Office: housing forms. The courts' foreclosure handout says to try housing counseling first to resolve a loan dispute.
• Idaho Court Assistance Office: legal services. A directory of legal help in Idaho, including housing.
• Idaho Attorney General: consumer protection. Where to file a complaint about a business.
• CFPB: find a housing counselor. Search HUD-approved counseling agencies in Idaho.