Can anyone explain to me the foreclosure process and answer a few questions I have?

I can explain the foreclosure process in broad strokes for you. I don't know anything about your specific situation, so if you post our more info, maybe I (and others too) can better help you.
Okay, so say you're several months behind on your mortgage, you've failed at work out plans with the bank/mortgage company and you haven't been able to sell the home, for a short-sale or otherwise and the bank won't take a deed in lieu. If all that has occurred, then yes, they will foreclose on you. You will be officially served with foreclosure papers. Also at this time, a foreclosure sale date may also be set. You will be given a certain number of days to vacate the premisis. The bank will then sell the property for whatever they can get for it. This may happen at a public auction, or a real estate buyer will just buy it from the bank. If you owe more on the mortgage than it brings when the bank sells it, they can come after you for the difference.
I hope that helps.

If this is affecting you personally, try to work with their "loss mitigation" department, rather than their collection department. Hopefully, it hasn't gotten that far yet. They can help work something out.

We have a foreclosure/bank owned in our neighborhood right now. The bad part of it is that once an announcement has been made (before it's up for sale by the bank) that there's a foreclosure in progress, all these vampires show up, literally, uninvited, on your doorstep. They want to offer you cash for your house at firesale prices. They are VERY aggressive. We've actually approached a few who were going through the gate and snooping in the windows when there was no answer at the door and shooed them away. If they want it that bad (the owner died, and they don't know that), the bank name is in the notice and they can contact the bank's agent to see the property.

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We are not late on any payments. But it is getting harder and harder to make ends meet. We have a mortgage on this house but we own another home about an hour away. We are trying to sell both homes but have not had any offers. So we are debating about just moving to our second home that is paid for and sign our current home back to the bank. I wish one of them would sell but I don't see that happening anytime soon. Our current house needs alot of work that we just cannot afford right now. We have absolutely no money in savings. I prayed about this for some time and moving to other house just seems like our best option. My dh and I feel this would be best for us financially. Any thoughts?

So your one house is paid for? In that case, yes I would move back to that one. Short sale the other one you can't afford. A short sale is when you sell it for less than you owe, has to be done with bank approval but it doesn't hurt your credit as bad as a foreclosure.

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A woman is like a teabag. You never know how strong she is until she gets into hot water.-Eleanor Roosevelt

There is this $300 million or something in Minnesota that is supposed to help homeowners renegotiate their loan with the mortgage company. It is also there so that the mortgage company can be paid money and your loan can be based on the market value instead of how much you actually owe. So, instead of paying a $200k mortgage when our house is now worth $170k it would be renegotiated so we would only have a loan of $170!! So, my husband and I got the paperwork and it isn't as easy as it sounds. You have to make contact with the mortgage company, you have to be in foreclosure or very close to it etc. It kind of sucks for us that we are making payments on time and it only helps those that aren't...but anyways....

On one of the papers it said you have 12 months to stay in your home from the time the foreclosure paperwork is started. It said to keep all your money, don't pay the mortgage company another dime, just pay electricity and taxes and live there for a year for free and you'll have a nice savings. So, you could do that and save up your money and then once you are evicted move out. The bank cannot force you out of your home even after the auction/foreclosure. They need to have an eviction, just fyi.

Is your loan through a mortgage company or a local bank/credit union? A local bank will be more likely to work with you, because you can sit down with the manager and explain your situation and you can work together as two people trying to solve a problem. However, a big bank or a morgage company will not be as accomodating. They tend to be more "by the book" and will require you to be late/behind before they'll consider changing the terms of the contract.