You can basically consider yourself to be in the stages of pre-foreclosure when you start missing payments. When this occurs, your lender will be contacting you. They will probably send you a letter, send you an email, and even call you.
While you might be tempted to ignore these notices, this is not the best idea.
In fact, it is a better idea to actually call your lender before you even miss a payment to let them know that you are going to be having trouble. If you miss three or more consecutive payments, and are still failing to contact them to try to work it out, then most lenders will begin the official foreclosure process.
If you do not try to work things out with your lender before too long, formal foreclosure will begin. This is the process by which the bank legally repossesses your home. This process can be lengthy, or it can be short, depending upon several different things. However, keep in mind that constant communication with your bank is the best way to avoid foreclosure.
If the foreclosure hearing comes and goes without you doing anything to stop the foreclosure, then the bank will begin the process of selling the house they have just repossessed to the highest bidder. This buyer will then be able to evict you, usually with the help of the local sheriff. Mortgage foreclosure is becoming more and more common as homeowners struggle to make payments in the midst of a huge economic downturn, but remember that staying in touch with your bank is the best way to avoid this.
If your lender ends up foreclosing on you, then you may suffer some adverse consequences depending on your states laws, your lender and your financial well being. This can involve a possible deficiency judgement (lawsuit in which your lender sues to recover damages and the remaining balance of the mortgage) and or future wage garnishment.
It is wise to get educated on your states laws and speak with an attorney about the repercussions you may face if foreclosure happens. Many people have bounced back and consider themselves better and more educated consumers. Maybe you will see the positives and work on your life as opposed to letting this stress you out and depress you. There is no good that will come out of feeling bad or sorry for yourself.
You can join our forum, tell us your story and get your stress out. Writing and sharing your problems in an anonymous setting with others helps you cope with the internal issues you have.
Please stay strong and keep the hope alive!