Foreclosure consequences can be severe so lets look at these in more detail from both the owner & renters perspective
Foreclosure Consequences if You Own Your Home
If you are the home owner and you are not able to make your mortgage payments you will be forced to go through foreclosure. There are times when you can work out a deal with your mortgage company, but most of the time it will end in foreclosure anyway.
If you have to go through foreclosure when you are the property owner, you will face consequences from the foreclosure. The main one is the bank will take the property back into their possession.
The bank will then put your property up for auction and try to sell it for as much as they can trying to get at least what is owed on the property. If the property does not bring in enough money to pay off the debt then the bank can still hold you liable to repay the money owed.
So a few consequences to put it plain and simple you will lose your house, you will not be able to purchase another house for 2 to 7 years and even then you will be required to put up a huge down payment. Another major consequence of foreclosing is your credit score will drastically fall. It will be a long, hard road to get your credit score ( this will show you what yours currently is ) back up and foreclosure will be on your report for at least seven years.
Foreclosure Consequences if You Are Renting
If you happen to be renting a property and the property owner ends up foreclosing on that property there, most likely, will be some consequences that you will need to be prepared for. Initially, you may not even know about the foreclosure as under normal circumstances it takes 3 to 6 months for a foreclosure to go through. If the property owner does not divulge any information to you, it is possible you will not find out until a bank representative comes knocking at your door.
If you signed a contract with the property owner, and you are paying a reasonable amount of rent, the bank might try to work with you and accept the rent if possible until your lease is up. Once the lease is up, the bank will decide what to do then and it will be on their terms.
However, if the rent being paid each month is not acceptable to the bank, they do not have to accept the contract and will have the right to evict you from their property. There are foreclosure consequences if you are renting a property that is being foreclosed on so be careful who you rent from.