The possiblity of losing one's home to foreclosure is a terrible proposition. If you find yourself in this situation, you must be proactive to reach a workable solution.
If you think you're in trouble, are having difficulty making your mortgage payments, are about to miss a payment or missed a payment, then immediately contact your mortgage company to develp a workout plan. Ask for the loss mitigation department. Don't wait until you're several months behind in your payments. Interest on your loan will continue to accrue, and the further behind you get, the more money will be required to bring your mortgage current. Remember, it is more expensive for the mortgage company to go through foreclosure than to develop a workout plan, but you must be proactive and persistent. The mortgage company really does not want to own your home.
Once the mortgage company has reviewed documentation submitted for a possible workout plan, a decision point it reached. They will either develop a workout plan to allow you to remain in the home or continue foreclosure proceedings. You may want to sell your home prior to the foreclosure date through what's called a "short sale", essentially selling the home for less than the outstanding mortgage balance subject to your lender's approval. For more information regarding short sales, contact your local real estate agent.
After you miss a mortgage payment, the mortgage company will attempt to contact you either by letter or phone to address the missed payment. Do not ignore the inquiries of the mortgage company. You will want to work with them to develop a workable solution.
The foreclosure process in Virginia is roughly as follows (timing varies depending on the mortgage company, the foreclosure process varies by state):
Miss a payment, the mortgage company contacts you to address the missed payment.
Miss a second and third payment, the mortage company continues to try to contact you, becomes more insistent.
Miss a fourth payment, you'll most likely receive a Notice of Default (letter indicating you're in default on the loan). At this point you're in pre-foreclosure.
Within 90 days of receiving the Notice of Default you'll receive a Notice of Sale saying the trustee of the mortgage will hold a trustee sale (foreclosure sale). The sale will take place within 30 days of the Notice of Sale on the courthouse steps. Notice of the trustee sale will be published daily in the local newspaper. If you have not moved out by the date of the foreclosure sale, the trustee will initiate eviction proceedings, and the sheriff's office will proceed to evict you from the home.
On the sale date, at a specified time, your home is auctioned for sale at the county courthouse. If the home does not sell at auction, it then becomes a Bank Owned Foreclosure property or REO (Real Estate Owned) property.
Defaulting on your home loan will seriously hurt your credit rating making it difficult to obtain any future financing.
If you declare bankruptcy, you will not be able to finance a home purchase again until 4 years from the date the bankrupty is cleared.
For more information, please contact your local real estate agent, mortgage company, and/or real estate attorney.