What Happens During A Foreclosure is more of a step-by-step process where the lender tries to get their money. Once a person has missed their first payment, their lender will send a late notice out to their home. If the Homeowner chooses to ignore the first notice, the lender will send another notice for payments. Finally if the homeowner ignores the last notice, the lender will make a demand for a payment in full. This is known as the acceleration clause, which is included in most mortgage contracts.
Acceleration Clause
Once a person is behind on their mortgage by three to six months, the mortgage lender can invoke the acceleration clause in the mortgage contract. Once this is done, the bank will only accept the full payment of the mortgage, plus any late payments or legal fees. This is just about the time that the Foreclosure process is normally started.
Certified Foreclosure Letter
The lender will deliver a certified letter of Foreclosure to the homeowner. They are normally delivered by the local Sheriff or a processor. Next the lender will send the information of the foreclosure to the local newspaper to place it in the legal area of the publication. At this point the homeowner can try to work out something with their bank, but in most cases the bank will only stop the foreclosure process if they can receive the full payment for the home.
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