After your have fallen behind four months of mortgage payments and have received the "Demand Letter" or "Notice to Accelerate," the actual foreclosure begins. Note that the specifics in the process vary from state to state, but the earlier you speak with a foreclosure attorney about stopping foreclosure, the easier the process of saving your house and your credit.
Sheriff's or Public Trustee's Sale: The attorney for the lender will schedule a Sale of your home. This is the actual day of foreclosure. While the specifics vary, you may be notified of the date by mail, a notice is taped to your door, and the sale may be advertised in a local paper. The exact period of time between the Demand or Notice to Accelerate Letter and the actual Sale varies by state; it can be as quick as 2-3 months. While this is not the move-out date, the end is near. You have until the date of sale to make arrangements with your lender or to pay the total amount owed, including attorney fees. At this point, you can still speak with a foreclosure attorney about possible ways of stopping foreclosure.
Redemption Period: After the sale date, you may enter a redemption period. You will be notified of your time frame on the same notice that your state uses for your Sheriff's or Public Trustee's Sale.
If the lender succeeds in the foreclosure proceedings and the foreclosed property is sold at auction, the money received for your home is used to pay off the lender and any other liens against the property. Often, the proceeds from the sale of the property at auction do not cover the amount owed to the lender. This is what is happening with many recent home foreclosures because of the bursting of the housing bubble and the rapid decline of home prices (below their market value at the time of purchase).
State laws, which vary, also determine when the lender can force the homeowner out of their house during the foreclosure process. If the homeowner does not leave as requested, a local eviction will take place. To avoid this painful process, if you are facing foreclosure, speak with a foreclosure lawyer as early in the process as possible.