- If you stop making your monthly mortgage payments, regardless of the reason, you are in default of the loan contract. PHH will make multiple attempts to contact you and make arrangements to bring the note current, but if those attempts fail it will take further action to foreclose on the property. Under the acceleration clause in your mortgage contract, once you default on the note PHH is permitted to demand the full amount due.
- If you cannot provide payment for the full balance due on your mortgage note or successfully make alternate arrangements, PHH will begin the auction process. Your property will be listed in local newspapers or other publications with details of the time and date the auction will be held. The property is sold to the highest bidder, and the sale price goes toward reducing the money you owe to the lender.
- It is not uncommon for property to go unsold after an auction. If no bids meet the minimum requirements set by PHH, or if no bids are received at all, when the auction ends the property is simply kept by the lender. This leaves PHH with a home it does not want and an unpaid balance it cannot collect.
- When PHH ends up retaining property after an unsuccessful auction, it makes other arrangements to sell your home, usually at a highly discounted price. Real estate agents are typically involved in listing and showing the property, and all reasonable offers are considered. PHH will deduct the sale price of the home from the amount of your unpaid mortgage balance, leaving the remainder as an unsecured debt that ultimately becomes a civil judgment against you.
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