As you research issues related to a foreclosure, you need to keep in mind the fundamental difference between the foreclosure laws of different states. Some states are non judicial and some are judicial. The difference is whether the mortgage company must go to court to get the foreclosure.
Non Judicial States (Such As Alabama) Do Not Have Court Involvement In Foreclosures
In non judicial states, such as Alabama, the foreclosure is a private matter that does not involve the court system. The mortgage company declares that you are behind and in default of your note (the loan) and that the company has the right to foreclose on your home. The process is typically the same in these types of states. We'll use Alabama as an example. The mortgage company sends you a letter declaring that you are in default and gives you a date to correct it and a date that the foreclosure sale will happen. Then three weeks of advertisements occur in a local newspaper and then your home is sold at the courthouse steps. The actual sale is simply a person who "auctions" the home off during legal hours on the day of the sale. Finally, the foreclosure deed in favor of the company that bought your home (normally the mortgage company) is recorded. After this, then if you don't leave your home, you will be sued for eviction.
Judicial Foreclosure States (Such As Florida) Require The Mortgage Company To Sue To Foreclose
In these types of states, the foreclosure is not a private matter - it is a public matter that the courts must approve. The mortgage company will sue the homeowner (and any other occupants typically) and ask the court to declare that the home should be sold at a foreclosure auction. This means you must be served with a copy of the lawsuit and you will have an opportunity to defend against the foreclosure in court.
What Steps Should You Consider If In A Non Judicial Foreclosure State (Such As Alabama)
Remember that a judge will not review the foreclosure unless you file suit or unless you wait until the mortgage company sues you to eject or evict you after the foreclosure sale. So, if you have questions or concerns about the foreclosure process (and most foreclosures in Alabama are improper in my opinion) then you should consult with a foreclosure defense lawyer. Often times you can sue to stop the foreclosure which means that instead of it being a private matter without a judge looking at it, you will now have a judge and possibly a jury reviewing what the mortgage company did to see if the law has been followed. The best way to protect yourself is to carefully document everything that is happening with the mortgage company - all calls, letters, credit reporting, fees (such as inspection fees), and expenses (foreclosure expenses, etc). This will help you to be in the best position to have a foreclosure defense lawyer review your situation to advise you of your options.
What Steps Should You Consider If In A Judicial Foreclosure State (Such As Florida)
The biggest mistake is to not answer the lawsuit. Avoid this - respond to the lawsuit. If you don't respond, normally the court will enter a "default judgment." This means you lose because you did not show up - it is similar to a football team not showing up for a big game. If you don't show up, you lose. It doesn't matter if you have a great defense - if you don't show up it won't do you a bit of good. So make sure you don't ignore the suit - instead get with a foreclosure defense lawyer (either a private lawyer or a legal aid lawyer) and see what your options are. As discussed in step three, make sure you are carefully documenting everything that is happening. Save all voicemails, all envelopes, etc. so that your lawyer can help you paint an accurate picture of what has happened to you leading up to the foreclosure.
Facing a foreclosure in any kind of state (judicial or non judicial) is frightening. For most of us our house is not just the place we live but the place where our lives are centered around. It is our home. The old saying is true that for most people "their home is their castle" and we don't like anyone threatening to take our home away from us. Sometimes when we are scared we stop taking action. We ignore things. But we can't do that - we must learn about our rights and take action. This problem won't go away on its own - so let's face it head on and give us the best chance to save our home from those who are willing to break the law to try and take our home.