Bank Homeowner Mortgage Payments Foreclosure Loan Process Owner

When homeowners are not able to "make" (pay) their monthly mortgage payments, they enter the "foreclosure process," or the process through which the bank "takes possession of" (becomes the owner of) the home for which the mortgage loan was made. Most banks have a "grace period" (a period of time when something is allowed to happen without punishment) for making mortgage payments, so if a homeowner is a few weeks or month late with the payments, nothing will happen. But if the "outstanding balance" (unpaid amount) "accrues" (continues to add up) over time, the bank will start the foreclosure process.

"Initially" (at the beginning; at first), the bank sends "missed payment notices" (letters letting the homeowner know a payment was not received) and calls them to "request" (ask for) or "demand" (insist) on payment. After one month, the bank may send a "notice of default," which is a letter informing the homeowner that he or she has "violated" (not followed) the "terms" (requirements) of the loan. At this point, homeowners might ask the bank to allow them to make "partial" (less than the full amount) payments, or let them have a few months more to pay, but the bank does not have to agree to these requests.

Typically, if three months pass without payment, the bank begins the foreclosure process. First the homeowner receives a "foreclosure notice," which is a letter explaining that the bank has scheduled the sale of the home, typically in an "auction" (event where buyers indicate the price they are willing to pay, with the person willing to pay the highest price buying it). The homeowner is told when to "vacate the premises" (leave the building and property), and the bank becomes the owner until it is able to sell the home.