What this means is that when your home is foreclosed on you must move and find another place to live. Normally foreclosed property is offered for sale through a public auction (search for Foreclosure Listings here). This is done so the lien holder of the property, usually a bank, to receive enough money back to pay for the lien on the property. After the property is sold, the bank or creditor has foreclosed its lien.
There are two types of home foreclosures. One being "strict foreclosure" which is when the bank on contract claims the satisfaction of the debt back by claiming the title and possession of the property. Next, an officer of the court, in that county, will put up the house or property for auction, most often. What is usually done is that the bidders will bid only on the amount that is owed on the property and if no one else bids on the property is will be sold for the amount that is still owed. The winning bidder will then receive the title to the property and will take possession.
In the United States, a few states have what they call non-judicial forclosures. With this type of foreclosure, the creditor or bank will give the homeowner what is called a notice of default and their intent to sell the property (house or land). The homeowner will then be able to pay off the debt or even file for bankruptcy to stop the sale of their home. If the homeowner does not pay off the debt or file for bankruptcy, the creditor will auction off the property. Who ever bids the highest will be the new owner of the property free and clear.
Reading your contract and understanding how far behind you can get in your mortgage payments is necessary if you do not desire to have your home foreclosed upon - you don't want to become a forclosures statistic. Some banks or creditors will allow some leniency according to the reasons you have fallen behind in your payments and if you are diligently making an effort to repay your debt (Bank Foreclosures). Understanding the laws in your state regarding foreclosures and bankruptcy is very important. Many times, getting behind in your mortgage payment cannot be avoided such as an automobile accident that puts the main breadwinner in the hospital and unable to work for a long of period.
Looking to invest in distressed properties in the Hampton Roads area of Virginia, more specifically in Chesapeake, go here.
If you find yourself in trouble and are behind in your mortgage payments, it would be best to talk with a foreclosure attorney.
Once you buy your home, don't forget to protect yourself with mortgage protection life insurance. Better be safe, than sorry.
As with any real estate contract (buying forclosures included), it is a good idea to contact a professional for legal advice. You don't want your home to be another of the thousands of repo homes on the market.