When you have borrowed money from a bank or Mortgage Company to purchase or refinance a home and you cannot pay them back, they may take possession of the house. The events associated with this legal action are part of the foreclosure process. However, the bank cannot throw you out of your home. Only an order of the court has the legal weight to force you to leave. You may be evicted eventually, but there are procedures codified within the court system that have to be followed by the mortgage holder.



Although many states have similar procedures for the foreclosure process, almost all the states have their own, fairly unique systems of foreclosure. If you find yourself in the foreclosure process, it is advisable to immediately consult a qualified attorney, familiar with the laws in your state. In general, the stages are divided into pre-foreclosure and the formal legal foreclosure process. The pre foreclosure stage begins when the customer defaults on mortgage payments and the lender, in writing or by phone, tries to contact them to resolve the situation.

The bank issues a demand for the payment in full, failing a resolution. Once this demand is issued, you legally owe the bank the full balance along with interest, late charges, legal fees etc, in a lump sum. From this stage onwards, the bank will no longer accept monthly payments. Once the demand has been issued and the note accelerated, you should contact an attorney.

The formal legal foreclosure process begins when the bank sends you a Notice of Intent to Foreclose, by sheriff or certified mail and initiates action in the court. Legal notices are published in the local papers. After the notice and the waiting periods are over, the court hears the lender issues and gives an order allowing the bank to foreclose. It is at this point that a legal notice of foreclosure sale is published in the local papers and the house is sold to the highest bidder in an auction.

This process normally lasts from the time you miss the first payment, to the actual foreclosure sale. It is not uncommon for six months or more to have passed before the house is sold. It varies from state to state and could be much more or considerably less, depending on the state. You dont actually have to move out of your house during the process. Even when the process is completed, the ownership of the house is merely transferred from you to the highest bidder. This transfer is completed at the closing that follows the auction and you automatically become a tenant in the house. From here on, the new owner has to follow legal procedures, according to the state, for eviction.

There are some options available to you even after the foreclosure process has begun. Depending on your assets, liabilities, income, expenses and why the house is in foreclosure, a professional can direct you to choose the best option. The solution will depend on the type of mortgage and the point in the foreclosure process that you decide on to try to save the house. Law firms specializing in residential foreclosures on the debtor side of the issue are usually familiar with all of the available options and can help you to make the best choice.