What happens after your home has been foreclosed on?

If you are going through the foreclosure process you are definitely not alone. These days are hard for many homeowners to pay their mortgage due to the economic crisis we are currently facing in the United States. It is important to remember that a foreclosure must go through a legal process and your mortgage lender must meet many requirements before proceeding.

So because of this you may still have time before you will have to back your belongings and leave your home. To proceed with foreclosure your lender must complete the process which may take some time, I have actually seen it take a year or so on more than one occasion.

You may think that your mortgage lender just wants to get their property back as soon as possible after you begin to default, but you are wrong. The lender usually seems to hesitate on the actual foreclosure because it would cost them a significant amount to do so. During the process the lender will be required to pay certain expenses that obtain to foreclosing on the property. This can easily cost the mortgage lender about ten thousand per month to do so. If the lender does choose to go forth with the foreclosure the chances are the home will lose a good amount of its current value.

If you are currently undergoing the foreclosure process be aware that there still may be a way to fix your situation and bring your loan back to current. Most lenders will work with you and/or lawyer on a possible workout solution such as a loan modification, short sale, or possible even a deed in lieu. They are also well aware of the housing crisis and know they will not be able to sell the property at a decent price. This is one major reason why so many lenders are willing to work with their borrowers on some sort of agreement.

You must be prepared when first approaching your lender for a possible workout solution. Calculate all of your current monthly expenses and decide if there are some expenses listed you can live without. Including luxury expenses such as satellite TV, magazine subscriptions, etc. This will all affect you chances of receiving a loan modification.

But what if you are denied for the loan modification and the foreclosure takes its course?

1. Some homeowners may get lucky enough to find someone who is willing to buy their property at a decent price. However, try to make sure that you are able to sell the property for at least the remaining balance on the properties mortgage. If this happens the foreclosure will become void and you will have the mortgage paid off in full.

2. Try to negotiate with your lender for a possible refinance. This may be very difficult especially in today's economy, but if accomplished you will be able to avoid foreclosure completely.

3. Your home will be sold at a public auction to the highest bidder. If this event takes place you will lose your home right then, if there is no right of redemption in your state. This will usually vary state to state.

4. If no one happens to bid at the time of sale the lender will then own the property once again. A deed in lieu may help you lessen the damage on your credit score before the foreclosure hits it.

However, you may still get you home back after the foreclosure has taken place! You may want to check with a reputable lawyer because this law will vary state to state. Anyway, the redemption period is available in some states and is a certain amount of time for you to regain your home. This means that even after the auction has taken place you will not be immediately kicked out of the home. You may still have anywhere from a few days to a few months.

So remember that even if you are in the foreclosure process or maybe right around the corner from the sale date, there may still be a chance for you to remain in your property.

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Moe Bedard
Founder at LoanSafe.org
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.
  • Anonymous

    i have lived here all my life, since 1967 when my mother bought this home.my mom was not aware of the terms of the reverse mortgage she had gotten in 2005 and they were not completly honest about all the details that she would leave me to deal with.this mortgage company only caused my mother heartache and worry in her last days when she should of had nothing but peace. everything that they had done since the beginning was dishonest and not fair at all. when they started they had appraised my moms home as a four bedroom home with a screened in back porch. they hired a PEST CONTROL CO. to repair some damages and to upgrade her back bedroom and screened in back porch. they tore down the bedroom and the porch and poured new concrete foundation and built the room and porch back on. the county informed us that there was no permits and their work was done poorly and not up to code and had to be tore down leaving my mother with no back bedroom or screened in backporch that she once enjoyed leaving the back of the house exposed without siding and for that reason they canceled our homeowners insurance. after leaving her with no bedroom and screened in porch they convinced my mother into re roof and re side her garage , they got a permit to reroof and for residing, they tore down my mothers garage and reframed it and when the county came to inspect their work the inspector informed us that this was a new structure not a re roof or re siding and the county made her tear it down leaving her with no garage. once again they convinced my mom to build another new structureon the other side of the yard so they wouldnt lose the $16,000.00 for the repair set aside that this MORTGAGE said my mother had to do. that money was suposed to be for the house to bring up the property value instead my mother had to watch her home be destroyed room by room witch left her emotionly stressed and with alot of worries witch helped lead to my mothers death.we had told the man handeling the loan that we felt tis pest control company was not qualified after we experienced some of thier mistakes but he insisted that this specific company be the one to do the work.when the time came we were supose to be able to refinance the reverse mortgage to keep our home but was unable to because the house was not worth the amount of the loan and because i have a low credit score that leaves me where i am today, im waiting for the sherriff to come and give us the notice to vacate, i do not want to abandon my home

  • adren jarrid

    I am becoming exceeding concerned that the company that is helping me with my modification is tagging me along so that it will be easier for the WAMU to force us out of our home. I pray I am wrong. WAMU is impossible to deal with, and my modification company tells me that my application is still under review and that WAMU is backed up with numerous applications as they struggle to change over to the CHASE system. My Lord.

  • Debbie

    Hi Evan take things 1 day @ a time. If you could, please give me a call? I just want to have some insight on what you are going through and also need to see if you have any knowledge on my situation. Thank you for your time. Debbie. 510 938-5937

  • Sonya Valles

    I have a few concerns about my home. I got notice to leave my home because it has been forclosed. I was confiding in my attorney that as long as they were working on my case the house could not be touched now I have less than two weeks to find a new home. Is it to late for me to save my house.

  • empireconcept

    I had my home foreclosed and sold at auction. What happens if there was a equity loan based on mortgage also. I was told this should have gone with the house but now the bank is trying to collect on it. What is the truth to this?

  • http://www.loansafe.org Moe Bedard

    More often than not you will owe the balance left on the mortgage, but it depends on the state and if it is a recourse mortgage. What state are you in?

  • http://www.loansafe.org Moe Bedard

    More often than not you will owe the balance left on the mortgage, but it depends on the state and if it is a recourse mortgage. What state are you in?

  • Patricia

    I had my house foreclosed and I am trying to see if there is anything I can do to try and keep my home I have a small child and no where to go. Does anyone know of anything that I can do??? I NEED HELP PLEASE!!!

  • http://www.loansafe.org Evan Bedard

    Hello Patricia,

    I’m so sorry to hear what has happened. Are you still residing in the home and has it actually went to foreclosure or is your account in the foreclosure process?

  • mayra

    Hi just looking for some help. I bought a home 9 years ago after a few years i tried to apply for a home equity line of credit but my credit is not good so I was advice to add my dad to the title so i did that my dad in the title only not in the mortgage loans then he applied for the line of credit and got approved good!!! Now 2 years ago my house was forclosed lost my home but i kept paying the line of credit every month cause i didnt want to mess up my dads credit now here comes the hard part I cant give the payments no more I’m a single mom and my income is my daughters SSI I need help I tried calling the bank and explaining my situation but they just transfer me from one person to another from one number to another each person says something different so now im still in the same position and worst that I have been paying for 6years this line of credit month to month and the balance has not gone down im going crazy with this situation can somebody help me thanks

  • Nichole

    I have been working with the mortgage company since June of last year to modify, everytime I think we’ve gotten somewhere they want a different form or something else. On December 3 I get the letter from the foreclosure attorney I have 60 to 90 days before the deed will be transfered back to Wells Fargo. Wells Fargo tells me I have a sale date of Jan 10th, and I received in the mail documents from the sheriff department with no date, just warning consumers about Foreclosure scams. My home preservation specialist will not return my call, and no one can tell me how the process works from here. I need to know how much time I have before I am on the streets with my kids with no place to go and I can’t find a soul to tell me 30 days, 60 days, 90 days before I have to vacate. This is all so very stressfull all around this time of the year.

  • barbara baney

    Nichole, I have had a similar experience with Wells Fargo, and from what I heard from the Trustees, at the sale of the property, there are other Wells Fargo loans wherein WF did not modify their loan and would not work with them and then the property was put up for sale and the Bank bought it

  • http://www.loansafe.org Evan Bedard

    Hello Barbara,

    Yes, we do have dozens (if not hundreds) of members here in our forums who ultimately lost their home to foreclosure because WF would not agree to a loan modification. They seem to be one of the more difficult servicers to work with and require documents no other bank requests to complete a loan mod, such as a subordination agreement if you have a 2nd mortgage attached to the property.. Which BTW should NEVER be needed to complete a loan modification.

  • Loree

    We have had exactly the same issues with a non cooperative Wells Fargo even with qualified applicants for refinance and modification.. Our dedicated point of contact Jennifer couldn’t even get access to our all of our records sometimes, so she said. She wasn’t rying to help us, she was trying to help them. Repeated requests for the same stuff even if they had it already. Scam you into thinking they’re gonna help you. They couldn’t care less. Then they harrass you if you do what they say and stop paying. No matter what, they got the big bailouts, they win, we lose – our HOMES!

  • Amy

    We got the letter from the attorney of the new owner yesterday. We are in GA. Is there anything we can do to stay in our home?

  • Paula

    What to do if your home has been foreclosed? In NJ. Been divorced since 2010. Ex husband refused to assist with selling home; even after a court order. 4 years later the home has been foreclosed. HELP…:-(