Many Individuals and families around the country are facing the alarming realization that they can no longer afford their mortgage payments and will soon lose their home. It is believed that in 2007 over 2.5 million families will be faced with foreclosure, a phenomenon that experts believe will continue to fuel a depreciating real estate market. The White House, led by President Bush and key members of congress, have acted to pass legislation to help provide some relief to homeowners. Everyday we hear about the sub-prime market collapse, mortgage companies closing and the difficulties in obtaining financing, in this volatile market while facing foreclosure can you afford to wait for federal assistance or should you take matters into your own hands?

Understand The Process

If you are facing foreclosure the first step in saving your home is understanding the process. It is important to know that the foreclosure process is a legal proceeding in which a bank or lender repossess a piece of property due to the inability of the borrower/homeowner to make the agreed upon schedule payments. Banks and lenders typically allow a couple months of payments to accrue before the foreclosure proceedings begin.

The First Step: Notice of Default

The Pre-Foreclosure stage begins with the bank/lender's notice of default and continues through the time the property is sold at auction. During this stage the bank/lender has notified the borrower/homeowner that they are in default (NOD) and that they have a period of time, determined by state law, to cure the default before the property is sold at auction to the highest bidder. At this point in the foreclosure proceedings the borrower/homeowner is allowed to bring the default current by paying the entire default amount, which usually includes penalties and fee's. In order to do this most borrowers/homeowners must sell their home and use the proceeds to pay the entire mortgage amount (sometimes the lender will allow a short pay - they will take less than what is owed).

Second Step: Notice of Sale

If the default is not cured within the specified time period, determined by state law, a foreclosure sale date is established. At this time, the borrower/homeowner will receive a Notice of Sale. This Notice of Sale will be posted on the property, recorded at the County Recorder's Office in the county where the property is located as well as published in the local newspaper over a three month period.

Third Step: Trustee Sale/Foreclosure Auction

At this point in the Foreclosure process the borrower/homeowner has not been able to provide enough funds acceptable to the bank/lender in order to cure the default or pay the entire mortgage amount. In order for the bank/lender to release the "bad debt" from their books the property is typically sold at a Trustee Sale or Foreclosure Auction. A Trustee Sale usually occurs on the steps of the County Courthouse where the property is located. The time and date of this auction are provided in the Notice of Sale and the property is auctioned in public to the highest bidder.

At Foreclosure auction an opening bid is set by the foreclosing bank/lender. The amount of the opening bid is typically determined by the amount of the outstanding balance of the mortgage as well as any late fee's, attorney fee's and any additional fee's which have been added. The property is then opened to the public for auction at the set auction price. If the property is purchased the lender is paid in full by the new owner wit cash/cashier's check within 24 hours. If the property is not sold the property ownership reverts to the defaulted bank/lender. At this time the property is now considered Real Estate Owned, REO. In order for the bank to recoup any monies related to this property it is typically listed for sale with a local real estate agent and marketed to the public for sale.

Communication - The Secret of Success

Now that you understand the foreclosure process what is next? It is important to understand that banks/lenders do not want to foreclose on your home unless there is no choice. Banks/lenders are in the business of selling mortgages, not owning and selling real estate. Also, the amount of the foreclosed loan is held on the books of the bank/lender and that bank/lender is now not able to lend a multiple of that amount to other borrowers. It is up to you to communicate with your lender and let them know if it is a short term problem which will be rectified within a couple months or a long term problem which you will not be able to recover from.

Short Term Solutions

There are several short term solutions which you can discuss with your bank/lender should you determine you issue to be a short term problem.
The first is Reinstatement. With mortgage reinstatement, if you are able to pay the bank/lender a lump some of money which cures your default amount, including penalties and fee's, the bank/lender will reinstate your loan and you can continue to make the monthly payments as normal.
The second is Forbearance. In this circumstance the bank will allow you to delay your payments for a short period of time until an option can be found to bring your mortgage payments up to date.
The third is making additional payments on future payments. This is exactly what it sounds like. For a short period of time the lender will allow you to delay mortgage payments with the agreement that you will make additional payments in the near future.

Long Term Solutions

Even if you believe your issues to be long term problems, there are still options available.

1) If you are able to maintain an income but are unable to repay the additional fee's and delinquent amounts, the lender may elect to add this amount to the balance of your loan.

2) If you are able to maintain an income but are unable to afford to continue to pay your current mortgage payment, the lender may elect to change the terms of your mortgage and reduce your mortgage amount. This will typically add an additional years worth of payments, but it will allow you to keep your home.

3) If the lender will not cooperate with the above mentioned solutions you can always try to sell your home. If you believe you might have equity in your home it would be wise to sell the property at a reduced amount in order to pay off the existing mortgage along with any fee's and delinquent amounts you might have incurred. This is important because the Notice of Sale can come and go before you are able to sell your home and access any of the equity.

4) If your mortgage is an FHA-backed loan, you may be able to receive a one-time payment from the FHA's insurance fund. In order to receive such a payment, your payments must be between four and twelve months past due. You must also be able to show proof that you'll be able to resume making full monthly payments on your mortgage. The FHA loan insurance solution will require that you allow the Department of Housing and Urban Development (HUD) to place a lien on your home for the amount you receive from the insurance fund. There's no interest on this insurance fund loan, but it must be repaid when you pay off your mortgage or sell your home.

Foreclosures are scary and cause stress in relationships, financial stress, embarrassment among your peers and difficulties in obtaining financing in the future. Are you willing to leave your family and future financial stability in the hands of the federal government or will you take action today!

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Foreclosure Victims Helping Foreclosure Victims
A number of the homeowners that we talk to everyday are motivated by two main goals. The first, obviously, is to save their home from foreclosure, avoid potential scams, and get their financial lives back to normal. Teaching homeowners how to do each of these is the main purpose of our website, ... more...

Master The Mechanics Of Foreclosure - The Key To Being Effective In Pre-Foreclosure Investing
To confidently compete in the pre-foreclosure arena, every investor must master the mechanics of foreclosure. The events of foreclosure, the timeframes, the disposition of the proceeds of sale, and the effects of the sale ? these are all important landmarks in navigating through the foreclosure ... more...

Summary Of Vermont State Foreclosure Law
There are four different type of foreclosure are followed in Vermont. Strict foreclosure Power of sale foreclosure Judicial foreclosure Non-Judicial foreclosure What is the processing period for foreclosure in Vermont? Processing period is normally 210 days (Approximately 7 months) in Vermont. Is ... more...

Home Forclosure Help
9 tips for home foreclosure help Here outlined for you are nine things you can do if you want or need home foreclosure help. Home Foreclosure Help Tip #1. Make sure you have in place a Home Equity Line of Credit. For this home foreclosure help tip remember that if something comes up forcing you to ... more...