When can a credit union proceed to foreclosure if a borrower is delinquent?

A credit union is typically allowed to proceed to foreclosure after a borrower is 120 days delinquent on their mortgage payments. This timeframe generally aligns with federal regulations that provide borrowers with a period to cure their default before the lender can initiate foreclosure proceedings.

The rationale for this 120-day requirement is to ensure that borrowers have ample opportunity to rectify any financial difficulties and to avoid losing their homes. During this period, lenders often must engage in loss mitigation efforts, such as loan modification options or repayment plans, to assist borrowers in getting back on track.

The other options reflect either a timeframe that is too short, as some may argue that immediate foreclosure could be deemed unfair and aggressive, or they suggest methods such as requiring a court order, which, while possibly applicable in certain jurisdictions for specific cases, is not a general requirement for all foreclosure actions. Therefore, recognizing the 120-day rule provides a balanced approach to foreclosure that protects both the lender's interests and the borrower's rights.