Foreclosure on your home is the final step in a lengthy process that gives the homeowner every opportunity to save their home.

If you have allowed a bank to foreclose on your home and take it back in default, you may never be able to purchase a home with less than 25% down payment again for the rest of your life.

Before you reach the forclosure process, it is certainly preferable that you sell your home and pay off the mortgage in order so save yourself from something that in some cases is worse than bankruptcy.

Once the bank has foreclosed, the home will be sold, and the proceeds will be used to pay off your mortgage.  If there is a shortfall where the bank sells your home for less than what you owe on your mortgage, you will still be responsible for the remainder.