What Really Happens During a Foreclosure?

A Step‑by‑Step Breakdown

Foreclosure can feel overwhelming—but once you understand what’s ahead, you regain control. Here’s what typically happens:

Missed Payments Soon after a missed payment (or two), your lender may reach out. This is your chance to explain hardship, request a payment deferral, or ask about a hardship plan.

Notice of Default (or Acceleration) If payments aren’t made, lenders issue a formal notice. This either starts a judicial foreclosure (with lawsuits and court hearings) or non‑judicial foreclosure (direct auction), depending on your state.

Pre‑Foreclosure Period This provides time to negotiate loan modifications, extensions, reinstatement, or selling the home.

Auction Time If unresolved, the property goes to auction. If the winning bid exceeds the debt owed—including taxes and liens—that difference becomes surplus funds.

Post‑Auction: Eviction & Possession Once the property is sold, the new owner must legally remove residents, usually with a short relocation window.

Final Note: Even post‑auction, you may still have options—and potentially funds owed. Mercy Management is here to help you understand every step, protect your rights, and recover what’s yours.