Homeowners in most states have every opportunity to stop the foreclosure of a home even after it's repossessed and right up until the home is sold off by the mortgage holder. The foreclosure process can be both embarrassing and financially destructive with consequences ranging from damaged credit to potentially being homeless.
When Foreclosure Happens
Foreclosure proceedings begin in earnest when you reach 150 days late on your mortgage payments, according to Loan Safe. The bank or other lending institution who holds your mortgage files a "notice of trustee sale" which displays its intent to repossess your home. In states with judicial foreclosure, the bank is required to take you to court where a formal hearing is conducted to determine your eviction. All the bank has to do is show your delinquency to win foreclosure.
Auction Advertised
Once a hearing is completed, you have a fixed amount of time to vacate your former home -- usually 30 days. While you're packing up to move out, the bank is advertising your former home for public auction. This is a requirement of the foreclosure process, though it can be somewhat humiliating since the entire community is going to know you lost your home and it's now being sold off by the bank.
Damage to Your Credit Score
Foreclosure and repossession have severe consequences for your credit score. These bad debts remain on your credit report for at least 10 years and may prevent you from securing other lines of credit without fees and high interest rates. A home loan for a new piece of real property with a foreclosure on your credit report is highly unlikely. Bad credit can also hurt your ability to secure employment or receive a promotion with your current employer.
Last Chance to Save Your Home
According to Internal Revenue Code Section 6337, once your home has been repossessed but before the bank's public auction, you have an option to pay the past due amount on your mortgage and have your property returned to you. Some lenders may make you believe that the entire amount of the mortgage is due because of your delinquency -- don't believe them. Of course, the payment amount to settle the delinquency can be quite large depending on how long the foreclosure process has taken.
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