How To Handle Bank Foreclosure

Recently, my significant other and I found ourselves facing bank foreclosure on our home. We knew that it was coming. We had missed various mortgage payments during the time we were laid off from our jobs. Unfortunately, we made the mistake of not communicating our problems to the bank. We attempted to make do with part time jobs at fast food restaurants, but trying to make all of our payments on time and still have money to buy diapers and food for the kids was very difficult to achieve. It was a scary situation to confront.

The foreclosure first step is missing a payment on a mortgage.  It doesn't matter why you miss that first payment, but the foreclosure ball begins rolling at that point.  After fifteen days have passed from your missed payment, the bank will typically try to contact you.  If you don't talk to the bank, more problems will add.  Forty-five days later, the next step is in use.  At this time, you're usually warned, in writing, that you're facing foreclosure if you do not take action right away.  If you allow another thirty days to pass with nothing, the formal foreclosure paperwork will start. 

There are several steps you could take before the formal foreclosure process begins.  All of these however will vary from state to state.  In some states, you could file bankruptcy.  Most will allow you to keep your home as a protected asset.  There are two kinds of bankruptcy you could file for.  You can have your debts wiped out, or you could have your debts reorganized so that you can continue to pay lenders as much as you could and still having money to survive on.  Either way, the ability to file bankruptcy and keep your home will depend entirely upon the laws in your state.  Another thing you can do before the formal bank foreclosure process begins is talk to your lender. 

The majority of lenders are willing to work with customers to lower your mortgage payments temporarily, suspend payments for a few months until you get back on your feet, or make some other arrangements.  Banks do not want to foreclose on people.  There isn't some guy sitting in an office giggling manically thinking, "Hmm, whose house can I take today?" Foreclosures are as much hassle for the bank as they're heartache for the homeowner.  The final thing for you to do before the formal bank foreclosure process starts is look for resources to help you within your state.  There are many states that have foreclosure prevention associations that will provide you with the resources you want in this hard time. 

Even with the best foreclosure resources in the world, you may still be not able to prevent the sheriff from showing up on your doorstep with a foreclosure notice and giving you a couple minutes to get any belongings you could grab and head for the streets where you might be spending a very long time.  The essential thing to remember is to try other means to avoid this nasty process before it starts.