What Happens During Foreclosure?

While the individual steps involved in each of the steps in the foreclosure process are different in each state, the general process itself is the same. This article covers the foreclosure part of the foreclosure process, after the bank has accelerated your mortgage and demanded that the mortgage be fully paid. While this is often the point of no return with your current lender, all may not be lost - contact a foreclosure lawyer or expert as quickly as possible.

Steps In Foreclosure

1. Bank sends a notice of intent to foreclose to you by certified mail.
2. Bank files the necessary papers in court to begin the foreclosure process.
3. The required notices are published in local newspapers. This is not meant to be punitive, this is required by law.
4. At this point, there are still things you can do to avoid going to court, such as selling the house to someone else, but assuming these things don’t happen and the waiting periods for all the legal papers and notices expire, the process will enter a courtroom.
5. Court holds a hearing regarding the claim.
6. Court issues an order to foreclose.
7. The required notices of a foreclosure sale and any advertisements are published in local newspapers.
8. If again nothing is reached, the house is sold to the highest bidder at public auction.

All told, this process can take as little as 30 days (Alabama) to as long as a year (New York) and that length is one of the reasons why banks don’t want to go through with it. You may also notice that at no point are you evicted from your home, that’s because the foreclosure process doesn’t cover that at all. After the foreclosure, you are considered a tenant in the home and could perhaps arrangement to rent it from the new owners. If not, then the new owners have to follow the eviction process of your state which can also take some time as well.

There are numerous points in that process for you to reach a resolution with your lender but the longer you wait, the fewer the options. This is why communication with your lender is crucial if you want to stay in your house.