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  Foreclosure occurs when you stop paying your mortgage and the bank seizes your home in order to sell it and collect on the debt. Foreclosure has many emotional and legal ramifications. These ramifications can range from certain eviction to a possible lawsuit.
  
  

Eviction

• When the foreclosure process begins, you do not automatically have to leave your home. Instead, the bank--or whoever buys the home at a foreclosure auction--must formally evict you. When the court issues a notice of foreclosure, your home is sold at auction with the amount you owe as the starting bid. The bank or another owner may buy the home at this auction, and when they do, the title is transferred into their name. At that point, you automatically become their tenant and they must follow the formal rules of eviction for your state. In most cases, this means posting a notice of eviction, and, if you refuse to leave at that point, having a sheriff forcibly evict you.
  
  

Foreclosure Judgment

• The bank cannot just take your home if you stop paying. It must follow numerous steps, which, although they vary by jurisdiction, normally involve posting formal legal notices of foreclosure in the newspaper and getting a court order to foreclose on the home. The court order that allows the bank to foreclose on the home is a legal judgment against you. It will be displayed as a "judgment" in the Public Records section of your credit report, and notice of the foreclosure judgment will be published in your local paper.
  
  

Deficiency Judgment

• In some cases, the amount that the bank gets for the home at auction is not enough to fully cover the debt you owe, including legal fees and other penalties. Some states will allow the bank to sue you for any remaining balance due after the proceeds from the foreclosure auction. In states that allow this, this is called a deficiency judgment. The deficiency judgment is a separate legal action from the foreclosure and is displayed as such on your credit report. If the lender gets a deficiency judgment against you, the court may put a lien on any other properties you own, or even garnish your wages, in order to collect.