One thing that many homeowners don't think about when they first buy a house is foreclosure. They think that foreclosure is something that they will never have to face so when it does come up they are caught completely by surprise and have no idea what they should or should not be doing. So when something does happen whether it is the loss of a job or a sudden illness and the mortgage payments start to fall behind these people are suddenly faced with the scary foreclosure process. The good news is you can educate yourself about what you can do if the bank forecloses on your home or even threatens to foreclose on your home.

In the very beginning of the foreclosure process, which is when you first begin to fall behind on your mortgage payments, your lender is going to send you a letter informing you that you are behind on your mortgage payments and that you need to catch up. How long you are allowed to fall behind before you get this letter is going to depend on the state that you live in. But for the most part once you are behind by two payments you will begin to get a bunch of phone calls from your lender wanting you to make up both payments in order to get your loan current. But it usually isn't until you have fallen three months behind on your payments that your lender will begin the foreclosure process.

In beginning the foreclosure process the bank will begin it in one of two different ways. They might use a judicial sale, which is where the process has to go through the court system or they will use power of sale, which is something that can be carried out entirely by the mortgage holder. Keep in mind that every state allows the judicial sale, but only twenty-nine states will allow the power of sale. Here is a brief look at how both methods work:
Judicial sale

• Lender will file suit with the court system
• You will receive a letter from the court demanding payment
• You have 30 days to respond with payment to avoid foreclosure
• At the end of the payment period a judgment will be entered and the lender can request sale of the property by auction
• The auction is carried out by the sheriff's office, usually several months after the judgment
• Once the property is sold you are served with an eviction notice by the sheriff's office and you must vacate your former home immediately

Power of sale

• Lender will serve you with papers demanding payment

• After an established waiting period a deed of trust is drawn up that temporarily gives the property to a trustee

• Trustee will sell the house at public auction for the lender
• Many times these foreclosures are subjected to judicial review to ensure that everything is carried out legally
• Most of the time there is a requirement for the lender to post a public notice of sale for the auction

Now that you understand the basic steps that are involved in the foreclosure process you need to find out what you are supposed to do if the bank takes the first step to start the foreclosure process. The first thing that you are going to want to do is to contact your lender. You need to keep in mind that for the most part the banks do not want to foreclose on your home because of the fact that it is an expensive process and they might end up losing money on the sale of your home instead of breaking even or even making a profit. When you contact the bank make sure that you are honest with them about what is going on. Explain to them about what happened and how it is only a temporary situation. Many lenders will allow you to make payment arrangements to get caught up if you contact them early enough in the foreclosure process.

So to ensure that you contact them early enough in the foreclosure process make sure that you do not ignore any of the letters that they send you regarding your late payments. By avoiding the letters or the phone calls you are sending them the wrong message. When you do talk to your bank you want to write down who you spoke with, the date that you talked with them and what they had to say. You actually want to write this information down as soon as possible after the conversation so that you do not forget what was said between you and the bank. Keep in mind that you are probably going to have to go through various people before you make any progress with the bank because most banks will not accept partial payments, which scares people. But don't let it scare you continue talking with the bank to hopefully work out payment arrangements that will solve your problem.

If your bank is unwilling to make arrangements with you in regards to your missed payments then you are going to end up entering into the foreclosure process whether you like it or not. If you do end up getting served with papers stating that your house is getting foreclosed on by the bank one thing that you want to do is to contact a financial counselor to see what they can do to help you. Before meeting with the counselor you are going to want to gather up all of your bills that you pay each month and your income documents so that they can get an accurate look at how much money you bring in and spend each month. The reason that they do this is to help you create a budget so that you don't get involved in the same problems that made you face foreclosure.

After you have meet with the counselor you are going to want to find out everything that you can about the foreclosure process. One of the most important things that you are going to want to find out about is what you can do to avoid foreclosure or how to stop foreclosure before it happens. You will be surprised to find out that even if the bank has already started the foreclosure process there are still things that you can do to stop it, basically you will find alternatives to foreclosure. The good thing about the various alternatives to foreclosure is that even if you can't afford your mortgage payment each month you can still do something to try and save your credit. But you want to research the various options that you have so that you can pick the best one that fits your needs.

One thing to be aware of when the bank forecloses on your home is that the foreclosure papers that they have to file with the courts are actually public knowledge. What this means is that anybody can access the records and contact you about your house being in foreclosure. Some of these people who do contact you will be sincere in their efforts to help you stop the foreclosure process or offer you other solutions. But the sad part is that some of the people who do contact you will only be trying to scam you. A good rule of thumb to follow with these solicitors is that if it sounds too easy or too good to be true then it is usually some kind of scam. But also keep in mind that even if it is legit businesses these people do not have your best interests at heart, they are trying to make a profit off of your foreclosure.

When people are facing foreclosure the first thing that they begin to think about is finding a new place to live. Many people actually go so far as to rent a new place and simply abandon their homes. If the bank is foreclosing on your home leaving your home is actually the last thing that you want to do. You actually want to stay in it until the bank has gone through the entire eviction process. The reason for this is that there are a lot of programs out there that can help you pay your mortgage if you are having problems which will allow you to keep your home. But for the most part if you leave your home you are not going to qualify for the programs which will result in you losing your home.

So if the bank has begun the foreclosure process on your home you need to remember that there are things you can do to stop the foreclosure process both before and after it starts. The main thing to remember is that the worst thing you can do is to abandon the property and allow the process to happen.