When homeowners fall behind on their mortgage, the lender will eventually begin the legal process of foreclosing on the home. Depending on the state laws where the property is located, type of documents used in the loan, and the details contained in the documents, banks may pursue a judicial or nonjudicial foreclosure process. Typically, if a mortgage is used to secure the lien on the property (as opposed to a deed of trust), judicial foreclosure will be used by the mortgage company to take the property back.

In a judicial foreclosure, the first step usually involves the mortgage company sending a notice to the homeowners informing them of their late mortgage payments and stating an intent to foreclose on the property. If the borrowers do not work out some arrangement with the bank (such as a mortgage modification or repayment plan), refinance their home (with a foreclosure lender or hard money lender ), or sell in time, the bank will refer the loan to its attorneys. These attorneys will be located in the state in which the property is located and they will file the initial lawsuit in the local court against the homeowners.

The complaint will almost always be served on the homeowners, either by personal service (dropped off by a sheriff's deputy, in most cases) or sent via certified mail with return receipt requested and borrowers will have to go to the post office and sign for delivery. Once homeowners are served with the foreclosure complaint, they will usually be given twenty to thirty days to file their answer with the courts or file a Motion to Dismiss the case or a Motion for Extension of Time, if they need more time to file an answer. Banks rarely disagree with a Motion for Extension of Time, as long as the additional time requested is reasonable.

Sadly, this is the time when most borrowers simply avoid the lawsuit and fail to file an answer. This is nearly always a mistake and borrowers may want to consult with a foreclosure lawyer to prevent from losing an opportunity to defend their home.

Although most answers are filed in the form of a proper legal document, some courts will accept almost anything as an answer. This may even just involve a letter from the homeowners explaining why they fell behind and requesting more time to work out a solution or hold off on a sheriff sale. But when homeowners do not file anything, the bank is able to get a default judgment and have the home listed for sheriff sale very quickly, with no involvement or protest by the owners of the house.

Borrowers who mount a defense to a foreclosure lawsuit can often receive several additional months to stay in their home mortgage free. After all, the burden of proof is on the bank to show that the homeowners are behind on payments and that the bank has the legal right to collect those payments. Oftentimes, the borrowers have fallen behind, but the financial company suing them has no real legal right to the payments anyway, and the lawsuit can be thrown out or severely delayed, depending on the circumstances.

But most often, homeowners in foreclosure simply ignore the lawsuit and do not attempt to defend it in the courts. The bank wins a default judgment and a public auction of the property is scheduled at the first available opportunity. Some states may have a redemption period after the judgment and before the sale, but many will simply hold the foreclosure auction a few weeks to a couple of months later. After this, the new owners will be able to begin an eviction action against the foreclosure victims and force them out of the house within weeks or a month.