It seems a majority of homeowners do not attend the foreclosure hearing when the bank is suing them to take the house. This is almost universally a mistake, however, as the banks and courts are well aware of the fact that the owners are facing financial hardship and can not make the mortgage payment. This gives the foreclosure victims more leverage in working with the court and lender for a solution to avoid taking the home through the sheriff sale.
Especially for homeowners who can not save their homes, they may wish to attend the foreclosure hearing. Of course, if they have concluded there is no way to save the home and they do not have any problem with the mortgage company taking it through foreclosure, then they can probably skip the foreclosure hearing with no adverse consequences. The foreclosure process will continue according to the state foreclosure laws and the homeowners may never have to deal with a government bureaucrat or representative from the bank. With no effort by the homeowners, there is no chance to stop foreclosure, however.
The courts will award default judgment in the foreclosure lawsuit to the bank if the homeowners do not file an answer or appear at the hearing. If the foreclosure victims do not want to save the home or argument against any of the claims being made by the lender, then there may be no real reason to file any paperwork and get involved in the court process. Foreclosure can take months to wind its way through the court system, which just gives the mortgage company more time to add interest and attorney fees to the total amount owed on the default loan.
This is not to say that it is always a good plan to avoid going to the court hearing, as homeowners can get concessions from the bank and courts, as well as more opportunities to prevent the full foreclosure. The best idea for going to the hearing, even if the owners do not want to keep the house, would be to tell the court that they have been trying or would like to try to sell the property to pay off the loan but have not had Any luck yet. The owners can request some extra time (up to 1-2 months) to put the process on hold and find a buyer. The judge can allow them the extra time to work out the problem before going ahead with the foreclosure auction.
Possibly, with 2 extra months to sell the home, the owners would be able to find a buyer to stat the process, at least. And if they can find a buyer to put in an offer, even at a reasonable short sale, the bank will be much more willing to hold off on the rest of the foreclosure process until the sale is complete or the deal falls through. This can even include postponing an upcoming sheriff sale, as the mortgage company would rather have the loan paid off through a regular sale, instead of having to take a loss on the loan and end up with the property back. It costs the banks less money to help their clients stop foreclosure and avoid the worst of the consequences afterwards.
Asking the court for more time to sell the house might be the best chance for the homeowners to save some of their credit, as well. Paying off a loan, even if it was in foreclosure, will be a much more positive sign to potential lenders in the future, and will avoid the homeowners having to explain why they did not save the house. Not disputing the foreclosure is one thing, but appearing at the hearing just to request more time to avoid losing the home entirely might be worth it in the long run. Even if the homeowners can not save their property, it may make sense to use the court in self-defense and get more time to improve their financial positions.