Foreclosures are arguably the worst thing that can happen to a homeowner. Owning a home can be financially difficult and it often takes years for a homeowner to completely own a home. Therefore, it is important for every homeowner and for every home seller to inform prospective homeowners to know the answer to this question: How does a home go into foreclosure?

For those individuals who do not know what a foreclosure is, it is a legal process in which the interests that a homeowner has on their home are revoked due to missed mortgage payments. It is an action that can have disastrous effects on an individual’s credit history and should be avoided at all costs.

Usually, foreclosure proceedings will begin after the homeowner and borrower has skipped three mortgage payments. During these proceedings, the homeowner will receive a written notice of default against the property. If the loan source does not receive the owed mortgage payments, the homeowner’s interests in the home are then revoked. In order to recoup the mortgage debt, the loan source will foreclose on the mortgage. From there, the lender can either set up a trustee sale or a judicial foreclosure, in which the mortgaged property is sold at a public auction.

Although the homeowner has the option of regaining their interests in the foreclosed property by making back-payments on their mortgage debt, they must do so no later than a few days before the mortgaged property is put on sale. It is important to note that lenders would prefer to avoid the foreclosure process. Consequently, it is recommended that you consult with your lender in situations where you are in danger of missing mortgage payments.

For the most part, lenders will try to assist you. Whether it is informing you of what to expect from the foreclosure process or by offering loan workouts or loan cures, lenders realize how costly and time consuming foreclosures are. If you are currently in a situation where you are concerned about the possibility of your home being foreclosed, it is recommended that you talk to your loan source about ways to avoid a foreclosure.

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