Foreclosure: What to Expect
Here's what will happen once your house goes into foreclosure, whether you want to stay or move on.
Need Professional Help? Talk to a Lawyer.
Here's what will happen once your house goes into foreclosure, depending on whether you are trying to stay in your home or are resigned to moving on:
If you want to keep your home. Your first move should be finding a HUD-approved housing counselor. These folks are there to help you stay in your home and won’t charge you a penny for their help. Go to the website of the Department of Housing and Urban Development and click “Talk to a Housing Counselor” or contact the Homeownership Preservation Foundation at 888-995-HOPE (4673) or www.995hope.org and ask for a HUD-approved counselor in your area.
Most likely, your HUD-approved housing counselor will help you write a letter to your mortgage servicer. The letter will explain why you can’t make your mortgage payment and give information the servicer will need to determine your eligibility for help under the federal government's refinancing or mortgage payment modification programs. This letter will trigger action by your mortgage servicer, which will assess your eligibility for a HARP refinance or a HAMP modification under the Making Home Affordable program. See our article on refinancing or modifying your mortgage under the Making Home Affordable program and http://www.makinghomeaffordable.gov/pages/default.aspx for eligibility details.
If a modification or refinance is not in the cards, and depending on the procedure required by your state, you’ll receive some sort of notice (usually a formal written notice) that foreclosure is coming unless you make things right. Foreclosure procedures differ greatly depending on where you live and the nature of the loan. (See our Summary of State Foreclosure Laws to find out what you can expect to happen in your state.)
Unless you use one of the remedies explained in our article on Your Options to Avoid Foreclosure, the foreclosure will end, after a few months, with the sale of the property, typically at a public auction.