What Happens During Foreclosure?

You are likely afraid of foreclosure. But do you know what you are afraid for?Chances are, if you ask the average person what happens during a foreclosure, they'll tell you they don't know exactly. Knowing what your options are if a foreclosure is impending requires knowing some things about the foreclosure process, too. Here are the steps that occur after your bank has accelerated your payment process, demanding that the mortgage be paid in full. This might not be the point of no return, even if it seems like it.

1. Your bank will send you a notice of their intent to foreclose, usually via certified mail.
2. The bank then files the papers required to start the foreclosure process.
3. Notices are put in local newspapers, as required by the laws in your area and state.
4. At this point, you can still avoid going to court by selling your home or taking a few other actions.
5. If you haven't taken these actions, the foreclosure process enters the courtroom.
6. The court holds a hearing regarding the claim in question.
7. Provided the foreclosure is found to be justified, the court will issue an order to foreclose.
8. The law requires that notices of foreclosure sales be posted.
9. Any needed advertisements will be published in the newspaper.
10. If the homeowner (that's YOU!) does nothing, then the house will be sold to the highest bidder.
11. Foreclosure auctions are always public auctions.

Depending on your state, this process can take different amounts of time. For instance, in Alabama, foreclosure can take as little as a month. In New York, it can take more than a year. This is one reason most banks won't start the foreclosure process unless they have to. At no point in the foreclosure process will you be evicted. After the foreclosure, you're technically a tenant in the house. Some buyers will simply choose to rent foreclosed homes to their original owners. If they don't, however, the state eviction process will begin.

This process isn't inevitable. The steps listed above are those that happen if no attempt is made to stop foreclosure. While it's true that the longer you wait, the fewer options you have, you can talk to your lender and reach a resolution at many points along the way. Communication with your lender is the best, and often the only, way to keep your house if things have started going wrong. Hopefully, knowing what happens during a foreclosure can help if there's ever a problem and you're facing this serious situation. The more you know about a given process, the better your chances of overcoming it.

Educate Yourself, Protect Your House

The Foreclosure Emergency Kit is probably your best option right now. Download your free copy, read it twice and you'll stand a much better chance in saving your house. Claim your FREE copy here.