Foreclosure Process
When you miss a payment you will most likely receive a letter from your bank or lender informing you that you are delinquent (behind in house payments) 30 days, 60 days, 90 days, etc. These letters will only last so long, before the "clock" starts ticking. When I say "clock", I mean the window of time your bank or lender HAS TO LEGALLY wait before they can evict you (the time frame depends on your state laws).
If you DO NOT RESPOND to the letter(s), the bank assumes you do not want to stay in your home or that you may have already moved out in the middle of the night, which unfortunately does happen because people haven't been educated. If you don't contact your lender, you may actually be speeding up the process of foreclosure on your home. The best thing to do is stay in contact with them, even if you are not able to make payments. Bear in mind, if a foreclosure takes place, you will have the amount of the outstanding loan and any additional fees left on your credit report as debt owed. Just because you leave the property or are forced out by an eviction doesn't mean you no longer owe the lender the amount still outstanding. The only way to avoid carrying that debt is by filing for bankruptcy.
Bankruptcy can be a scary thought...I discuss the most common questions and concerns later. Although bankruptcy stays on your credit report for 10 years, a foreclosure stays on your report for 7 years. Either way you will have to rebuild your credit WHICH CAN BE DONE!! The difference between the two is that with foreclosure you are still responsible for paying back the lender. If foreclosure does occur, you still have time AFTER the sale of the home in which to stay in your home and try to reclaim it (the amount of time varies by state, see your state laws for clarification - www.foreclosurelaw.org).
FORECLOSURE TIMELINE What happens when I miss my mortgage (house) payments? Foreclosure may occur, but not right away. This is the process banks and lenders use to