Most states use non-judicial foreclosure. If this is the method in your state, here are the steps you need to understand.
The First Step: a Late Notice
Once you have missed a payment, you will most likely receive a late notice from your lender. This is the first step in the foreclosure process. Your lender will send you a letter informing you of the delinquency and warning you about late fees after your payment is thirty days late. A second notice, accompanied by a phone call, will follow when you are sixty days behind. Late notices are not generally made public.
Notice of Default
The second step in foreclosure is a notice of default. A lender may file this notice with the county recorder when your payments are sixty to ninety days behind and after the lender has contacted you repeatedly by phone or mail. You will receive a certified letter and a letter by regular mail notifying you of default. Some states also require lenders to place an announcement of foreclosure in the local newspaper for three to four weeks following a notice of default.
Notice of Sale
If you do not act upon the notice of default and bring your loan current, you will receive a notice of sale about ninety days following it. The time between the notices varies by state, so contact a foreclosure attorney or your state's attorney general for local regulations. As with default, the lender may be required to publish the notice of sale in the newspaper for three to four consecutive weeks. You'll receive the notice by mail and it will also be posted on your property.
Trustee Sale
The date of the foreclosure auction will be included in the notice of sale that you receive. If you fail to bring your loan current by this date or by an earlier deadline indicated in the letter, your home will be sold to the highest bidder at auction. Once the trustee sale is confirmed and the new owner takes possession, you must vacate the home or you will be removed by eviction.
Right of Redemption
The right of redemption does not apply to foreclosure in all states, so consult a local foreclosure attorney or your state's attorney general to find out whether it applies to you. If your state does allow right of redemption, you will be able to reclaim your home for up to twelve months after it is sold at auction if you can pay the loan balance and foreclosure fees in full.
The Judicial Foreclosure Process
Some states address foreclosure differently, with a judicial foreclosure process. If this is the case in your state, your lender will file a Lis Pendens with the court asserting that your home is in default. If the court decides in favor of the lender, it will order a public sale of your home, usually a sheriff's sale. This sale is similar to the trustee sale included in the non-judicial process.