The mortgage foreclosure process happens when a homeowner fails to pay his or her mortgage payments and the bank forecloses on the home. A mortgage foreclosure process is not the same as a tax foreclosure process which happens once a year. Mortgage foreclosure is a bigger problem for homeowners who cannot afford to pay their mortgages.

Different states have different rules for the mortgage foreclosure process. Lenders have to follow the rules when filing foreclosure on homes. Some states have more rules to follow than others but most of them have the same basic mortgage foreclosure process.

The mortgage foreclosure starts when a homeowner misses payments multiple times. The lender usually wait until three payments have been missed before they start thinking of foreclosure. A homeowner can call the lender to agreement a payment plan to avoid foreclosure and avoid being in default.

If the mortgage account is in default, then the lender will send the homeowner a notice of default. This is not a foreclosure notice but if you receive a notice of default, the next one might be a foreclosure notice. Most homeowners are scared but the lenders are often more than willing to negotiate at this point.

The notice of default often accompanies the notice of trustee's sale and they are served to the homeowners. In some states, these notices are mailed by certified mail and in others, although more rare, they are served by the Sheriff.

In some states, a foreclosure sign is also posted on the property in foreclosure. This is very embarrassing for the homeowner because friends and neighbors can now see how bad the homeowner's financial situation is. Most homeowners are too embarrassed and have moved out of their homes at this point.

The homeowner usually has few chances to pay off the mortgage balance and get the home back in his or her name. However, most people in foreclosure cannot find money to pay off the bank and getting a new loan can only lead to more problems. The last day a homeowner can reclaim the home is about six days before the foreclosure auction.

When the day of the trustee's foreclosure sale arrives, the lender will auction off the foreclosed home to the highest bidder. This is the final stage of the mortgage foreclosure process when the lender can finally get rid of the property and get some of the money back. Highest bidders are often people looking for cheap homes to fix or move into. Many of them are real estate investors.