Does anyone know what happens if you go into foreclosure?
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Answer:
Liek the other guys said, foreclosure is the WORST thing that can happen to you from a credit standpoint. It's worse then bankruptcy. If you are having trouble paying your mortgage, look to see the house on you own ASAP. Even if you have to accept a lower price in order to sell quickly, it is better then having the bank foreclose!
Good luck/
You learn the meaning of embarrasment, anger and desperation.
Talk to your lender first, to see if there are any options.
In my state, MI, the first thing, is public notice is given in a newspaper, here its the local law newspaper.
The newspaper ad, announced that on such and such a date your house will be auctioned off at such and such place.
Then the house gets auctioned off, and if somebody bought it, you have the right to redeem the property by paying off the mortgage in full...this usually is given 90 days, but it maybe more or less..
Then after that time, if you still havent left, the new owner can contact the county sheriff to have you removed from the premises.alll in all we are talking 6-9 months
(1): Your credit is destroyed
(2): The lender demands their money
(3) You lose the house and get evicted
Unless, of course, you contact the lender and work out an arrangement to sell your home and pay off your mortgage. Once the foreclosure starts, even if you "cure" it by paying off your loan, your credit is toast.
Don't go into foreclosure.
This question is a broad one. What do you mean by what happens? The process, the ramifications? Here is the process:
Generally a notice of default is sent when you are 90 days past due. After that, a lis pendens is filed with the county recorder in the county where the property is located. Contemporaneously therewith, a Complaint is filed in your local courthouse seeking ownership and possession of the property. Depending upon your state, the process can take from 30 days to 6 months after that. Generally the mortgage company will get a default judgment and proceed with a sheriff sale. Your house will be sold at public auction which is advertised in the local newspaper. The bank will bid its interest, the amount of the mortgage plus any expenses incurred, and if there are no other bidders that is it. The bank takes the house. If there are other bidders and your house is sold for more than you owe, you will be entitled to the surplus.
If the bank takes the house, it is not over. The bank then sells the house (or turns it over to the insuring agency or company) and if it sells for less than you owe, you are still liable for the difference between what the bank ultimately received and what you owed. Keep in mind that interest, taxes, water bills and other expenses continue to accrue during this entire process and it is very likely that you will owe more than the bank receives.
There are alternatives to foreclosure. They include, refinancing if done early enough, sale (possibly even a short sale), and bankruptcy. All of these are preferable to foreclosure for all parties involved.
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