Copyright 2006 Stellar Force

What you need to know about the foreclosure process. Learn what your rights are. How past due on mortgage payments can you be?

In a nutshell here is what happens in a foreclosure:

* You are behind in your payments to the mortgage company.

* Your home is security for the loan, so they want their money or your home.

* The mortgage company goes through the legal system in your state to gain possession(foreclosure) of your home.

* When the legal process is complete you are forced to leave your home behind.

The above is a little over simplified, so lets get into more detail.

Your are behind in your mortgage payments. Your dream of home ownership has begun to fade. Because of some hardship that has left you without sufficient funds to make your payments you will soon lose hearth and home.

When you are about 60 days behind, the lender will file a complaint with the court system in the county where you live. The complaint will include a copy of the mortgage and a statement that payments are not being made.

You will be sent a copy of the complaint with a notice that you can demand a hearing. (You would want a hearing if for some reason the debt claimed is incorrect. Another reason might be to delay the foreclosure process.) If you really owe the money on the security of your home, then the motion started by the complaint will eventually be granted.

After you have received the complaint notice, the court will grant the lender the right to proceed with the foreclosure.

The lender must then publish a notice of foreclosure in local newspapers stating their intention to repossess your house. After 3 to 4 weeks of notices a Sheriff's sale will be held.

If you have not paid the back payments plus penalties before the sale, then your home will be sold to the highest bidder. At this point you, your family and all your possesions must leave your home, either voluntarily or involuntarily.

This whole process can happen as fast as 2 months or as slow as 10 months, depending on such variables as who the lender is and which state you live in.

Here is the unfair part. Let's say you are behind 3 months on your mortgage. You are starting to have some good things happen. You find you have the 3 months of back payments to give to the lender. You go the lenders office and make the payments. You walk away feeling happy that you are now caught up with your mortgage. Next week you discover that the lender is proceeding with the foreclosure. What gives? Simple. The lender has charged late fees and penalties that can amount to as much as another monthly payment. You must negotiate with the lender before you make payment. Often you can get them to forgive the penalties. However, you must do it before payment, so you have some leverage.

It is important to realize that you can get your loan reinstated. The requirements are that you have recovered from the events that caused you be get behind. If you are now able to make the payments, but aren't able to make up the back payments, then you need to negotiate with the mortgage company. There are several approaches to deal with the missed payments and penalties. If you are unsure of how to proceed, then you must get help. You must stop the mortgage foreclosure if there is a way out.