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Foreclosures is a situation in which a homeowner is unable to make full principal and interest obligations on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as specified in the mortgage contract. One month after the homeowner misses a home loan payment, he/she is in default and will be notified by the lender. Three to six weeks after the homeowner yearns for a mortgage payment, supposing the mortgage is still delinquent, and the home owner has not composed the missed payments within a particular grace period, the lending company will commence to foreclose. Typically the farther behind the debtor falls, the more difficult it becomes to get up since lenders add fees for payments that are 10-15 days overdue.

Each state has the own foreclosure laws covering the notices the lender must post publicly and/or with the homeowner, the homeowner's selections for bringing the loan current and avoiding property foreclosure, and the process for promoting the property. In twenty two states – including Fl, Illinois, and Ny – judicial foreclosure is the norm, meaning the lender must go through the courts to get permission to foreclose by proving the borrower is delinquent.

If the foreclosure is approved, the local sheriff sales the property to the maximum bidder to try to recoup what the bank is due, or the bank becomes the owner and markets the home through the traditional route to recoup the loss. The entire judicial foreclosure process, from the borrower's first, missed transaction through the lender's sale of the home, usually will take 480 to 700 days, based on the Mortgage Bankers Organization of America.

The other 28 states – including Arizona, California, Georgia and Texas – mainly use non-judicial foreclosure, also referred to as the power of sale, which is commonly faster and will not go through the courts unless the house owner sues the lender.

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