When a lender sends a foreclosure letter, the letter usually announces that foreclosure will begin in 10 days, according to the Nolo legal website. If you find a way to pay your lender the late payments before then, plus interest and any costs your account has incurred, that will usually stop the process going any further.
If you can't bring your payments up to date, the lender will go ahead and file the lawsuit. The lender's attorneys then send you a summons and a formal legal complaint and give you time to respond, typically between 15 and 30 days. If you intend to fight the foreclosure in court, you have to respond, or the court will make a default judgment, probably in the lender's favor. Responding gives you the right to make a presentation to the judge on why you should keep your home.
If the judge rules in favor of your lender, the next step will be a letter notifying you of the date of sale. In many states, you can still stop the sale if you can amass enough money to pay off the mortgage in full, plus foreclosure expenses and other costs.
If you don't pay off your debts, the lender will put the home up for auction to the highest bidder. If it doesn't sell, then your lender becomes the new owner, Nolo states. Up until that moment, you're still the legal owner. It will usually take at least 3 months after notification before the house is sold, more if you fought the foreclosure action.
If the property is your personal home, you can continue living there until you receive an eviction notice, even after the sale. If the new owner doesn't ask for rent, you don't even have to pay to stay there. Once you get the notice, events will follow according to the eviction laws of your state.
In many states, such as California, lenders use deeds of trust, rather than a mortgage, to secure their claim on the house. If your lender has a deed of trust, it doesn't have to go to court to foreclose, and the whole process takes much less time.
source : http://homeguides.sfgate.com/happens-receive-foreclosure-notice-1762.html