About Mortgage Foreclosure

A mortgage foreclosure is when a secured creditor such as a bank obtains payment from the borrower by selling the borrower’s collateral based on a promissory note given by the borrower.

* When undergoing a mortgage foreclosure, the creditor or bank can’t just evict you from your house. A court order is necessary for you to be forced out of your home. There are procedures to be followed for both the mortgage foreclosure and the eviction.

* The mortgage foreclosure takes around six months or more to complete. This would start from your first missed payment. The exact length of time would depend on the state where you’re in, as well as on the aggressiveness of your creditor in pursuing the case. 

* When your house is put through a mortgage foreclosure, you don’t have to immediately leave your home. You can continue to live there even when your home has already been auctioned, in which case the ownership of your home is transferred to the highest bidder. When this happens, you become a tenant of your former home, and the now owner can start completing the procedures for your eviction.

* The eviction process can take from six weeks to six months to complete, although it usually takes 10 weeks. This starts from the time you receive notice.

* Proceeds from the auction sale are distributed according to priorities. Recipients in order of priority are the following: real estate taxes; first, second, third mortgage and so on; and attaching creditors or lien holders. This process for distributing the proceeds is repeated until the entire balance on the property is paid. Any money in excess is given to the former home owner.