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If you've missed a payment, you're normally sent a letter documenting the missed payment and requesting immediate payment of the past-due amount. Once you've missed several payments, you'll be sent a letter from the bank's lawyer. Receiving a letter from the lawyer means you're in trouble; you haven't just committed an oversight the bank wants corrected but are now considered a serious "problem debtor." When you hear from the lawyer, it means the bank has committed resources (time and money) to getting you to pay on time -- so they're serious. If you can't reach an agreement with the lawyer you'll be served with a summons. (The lawyer has very little reason to negotiate, so normally the only "agreement" you'll be able to reach is that you'll make your loan payments on time. starting immediately.) After "service," which is the process by which you're physically presented with the summons, the attorney will also file papers with the county courthouse. All other individuals with claims against the property ? they're called "junior" obligations ? like second mortgages, judgments, or other liens, are served with papers so they have the right to try to protect their interests as well. (It's important to note that if the foreclosing party is negligent in notifying junior lien holders, those creditors have a valid claim for repayment against the eventual new owner of the property. That's why purchasing title insurance when buying foreclosure properties is absolutely essential: you protect yourself against subsequent claims you didn't know about. After all, you don't want to have to be responsible for a lack of attention to detail by the foreclosing party.) To enforce money judgments you have to be served personally. That's one reason foreclosure actions can take so long ? the homeowner(s) must be tracked down and physically handed the summons. Often the homeowners won't want to be served and will do their best to avoid the server. Each jurisdiction has different laws and rules, but generally speaking if a person can't be located and all reasonable efforts have been made to find them, a procedure for publication is put into place. This typically consists of a public notice printed in the classified section of the local newspaper. Most jurisdictions also require public notice whether or not the homeowner has been served. This allows parties with a legitimate claim to come forward to protect their interests. After the publication process is complete the foreclosure action will proceed. If you can't come to an agreement with the bank's lawyer, and can't come up with the funds to pay off the loan, your property will be sold at a foreclosure auction, and you'll be evicted from the property ? if you haven't already left. The foreclosure process is extremely painful for the homeowner. The legal proceedings can take months to complete. The homeowners are subjected to pressure from banks and lawyers, public notice that their home is in the foreclosure process, and the realization that they will soon lose their home.
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