@brookview , I don’t have personal experience with exactly what you’ve asked (carrying out foreclosure on a note); although, I do have, right now, one chronically late-paying borrower who is now 5 months late (more on that below).
First, I would suggest calling FCI to find out what steps they have already done as part of their Basic servicing. For instance, have they mailed late notices to the borrower? Have they called the borrower, and if so, how many times and what was the outcome? Meaning, did the borrower answer the call, and if so, what did they say? This should all be recorded by FCI.
Next, I would ask FCI what options they can offer you under the circumstances, as the lender, in a situation such as this. While FCI does service a couple of notes for me, those are performing and paying on time, fortunately, so I can’t personally say how they would handle escalating things with a delinquent borrower, but I think that you can jump up to one of the higher tier servicing levels (higher cost and service level than Basic) until this gets resolved one way or another. Once you know what options you have with them, which ones, if any, you want to utilize would be a business decision you can make, based on the value of the unpaid principal balance and the monthly payment amount, compared to the costs for higher tier servicing, foreclosure, etc.
In the case with my problem borrower, fortunately, between their down payment and the 11 or so payments they did make (late) before stopping, I’m in the black relative to all of my costs for that property (my purchase price plus all closing costs, etc.). So I’m actually in the process of selling my “non-performing note” (clearly identified as such) for some other investor to try to do a workout with the borrower, or foreclose, at that investor’s option.
It sounds like your borrower might have stopped paying a bit earlier in the process (couple months in?). If that’s the case, I don’t know what impact that might have on the option of selling the note, hair on it and all. I suppose a near total lack of payment history (even late payments) might turn off some note buyers, but I could be totally wrong on that.