Foreclosure is the legal process through which a bank takes possession of your home when you don't pay back your mortgage loan. When foreclosures first started happening, they were handled by banks and real estate agents behind the scenes and out of sight from most people. Today foreclosures are on display more than ever before due to websites like RealtyTrac and new laws that force lenders and banks to publicize foreclosures as soon as they hit their desks. Foreclosure can be scary or nerve-wracking but is nothing out of the ordinary.

There are many foreclosures to choose from so it's important to use foreclosures wisely. You want to make sure both you and the bank get what they want out of the foreclosure, otherwise, you could be in for a lengthy legal battle that can drain your savings just as much as having no home does. The best way to handle foreclosures is to talk with your lender or servicer about why your payments are delinquent and come up with a plan that suits all parties involved. By acting quickly, discussing things calmly and rationally, not foreclosing if, at all possible, it is highly unlikely this will damage your credit score or ability to rent an apartment in the future.

Foreclosure isn't always bad news; sometimes foreclosures can be a blessing in disguise. For homeowners who are upside down on their mortgage, foreclosures offer a way to get out from under the debt without ruining their credit score. A foreclosure will stay on your credit report for seven years, but it won't prevent you from getting a car loan or home loan in the future. You'll just likely have to pay a higher interest rate.

Just because a property is foreclosed upon doesn't mean that it's automatically taken over by the bank. In fact, in most cases, the foreclosed homeowner still has some time to get their affairs in order and move out of the property before it's taken over by the bank. This is called the redemption period and generally lasts between 30 and 90 days, depending on the state. It is highly recommended that you use this time to get your personal affairs in order and move out of your foreclosed home before it's too late. 

The bank isn't going to pay attention to any repairs or junk piled up outside either while you're living there, so it might be a good idea to call a real estate agent who can put together an attractive foreclosed house listing for you.

Foreclosure should never come as a surprise. If you are struggling with making your mortgage payment, reach out for help sooner rather than later. There are many programs available today for homeowners looking for foreclosure help including government incentives and mediation services offered by banks. Your best chances at saving your foreclosed property are early intervention.