The 120-Day Rule: When a Mortgage Servicer Can Start Foreclosure
For most home loans, federal law sets a waiting period before foreclosure can begin. People often call it the 120-day rule. It comes from Regulation X, the federal mortgage servicing rules, and it applies in every state on top of state foreclosure law.
What the 120-day rule says
For a mortgage loan secured by the borrower’s principal residence, 12 C.F.R. § 1024.41(f)(1) says a servicer generally may not make the first notice or filing for any judicial or nonjudicial foreclosure unless the loan obligation is more than 120 days delinquent. However, the rule lists exceptions, so read the full text.
Loss mitigation applications
A second protection applies when a borrower asks for help. Under section 1024.41(g), if a borrower submits a complete loss mitigation application more than 37 days before a scheduled sale, the servicer may not move for a foreclosure judgment or order of sale, or conduct the sale, until the conditions in that subsection are met.
In practice, that makes a complete application important. So keep copies of everything you send, note the dates, and ask the servicer to confirm in writing when it considers the application complete.
How the 120-day rule fits with state law
These federal rules do not replace state law. Instead, they sit on top of state notice and sale requirements. Whether foreclosure in your state is judicial or nonjudicial, the state steps still apply. Our foreclosure by state guide shows each state’s main statute.
Also, the rules apply to covered loans and servicers as Regulation X defines them. For that reason, check the definitions and exemptions in the official text of Regulation X before relying on them.
Where to get help
The Consumer Financial Protection Bureau publishes guidance for homeowners. In addition, a HUD-approved housing counselor can explain your options. For legal advice about your own loan, talk to a licensed attorney in your state, for example through our directory.
Our full guide to federal pre-foreclosure protections covers both rules in more detail, with links to the official text.
