Foreclosure Process: Understanding Your Rights and Options

What Happens If My House Goes Into Foreclosure?

Virtually all homeowners, at one time or another, will be late on their monthly mortgage payment. Whether or not it's intentional, you may find yourself worrying about the consequences--will the bank repossess your home? How long do you have before foreclosure starts? Fortunately, you will be notified before the foreclosure process begins and will therefore have a chance to prevent it from happening. Moreover, although it varies by state, you usually have to be four months or more behind on your monthly payment for your lender to begin foreclosure. Foreclosure should not be a surprise, as your lender will undoubtedly notify you each month a payment is missed.

When Does Foreclosure Begin?

Most lenders do not want to start foreclosure proceedings--they profit more from your ownership--and will work with the owner to figure out alternate options. If, however, an agreement cannot be reached or you simply avoid your lender, foreclosure may be imminent. At this time, your lender will file a legal request to terminate your ownership rights to the property. You will receive a court-ordered notification regarding this, at which time you can pay the amount due or try to make alternate arrangements with your lender. If you're absolutely unable to pay the amount you owe, you can also try to sell the home on your own. However, if you do not pay the lender the total amount due within a specified amount of time, your home will go into foreclosure.

What Happens Next?

Once the foreclosure process begins, you have anywhere from seven to 130 days (depending on your state) to vacate the home. At the end of this period, the lender will repossess the property and hold a public auction. The property will be sold to the highest bidder who will then take over ownership of the home. If any possessions are left on the property, the new owner may file an eviction, which means he will retain rights to everything you left in the home or on its property. If you are still residing in the house at this time, a law enforcement officer will remove you and everyone else who is in the home. Although you may want to consider hiring an attorney to help during foreclosure or eviction, you should be aware that you are responsible for all legal fees incurred during these procedures.