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Foreclosure Steps:

Just like any other case where a loan becomes delinquent, the foreclosure process invovles a series of steps before a home is acutally foreclosed on.

1. Notice of default on the loan - The mortgage lender sends the homeowner a letter indicating that a payment was due and not received.  In most cases the letter issued is referred to as a notice of default or notice of delinquency, and will indicate how far behind the homeowner is in payments and what needs to be paid in order to place the loan back into good standing.  If the homeowner feels that they are able to continue making payments on the loan, they should notify their lender that they plan to make payments to restore the loan in good status. By proactively notifying the lender of their situation, there is a good chance that the lender will work out some sort or arrangement of payments.

2. Notice of Acceleration - Based on the state where the property is located, a notice of acceleration is issued by the lender indicating that the homeowner has the opportunity to pay the loan balance in full to prevent the home from going into foreclosure. The lender usually treats this as a final notice that they will be terminating the mortgage loan and foreclosing on the property.  At this stage, the homeowner should be seeking options to sell the property in order to prevent a foreclosure.
   

3. Notice of Sale - If the lender sets a date for the property to be sold, it is required that they send the homeowner a notice of sale.  Once the notice of sale has been issued, the homeowner still has until the sale date to rectify the situation.  After the sale has been reached, the homeowner no longer has legal rights to the property.
   
4. Public Auction - At this point in the process the homeowner has loss all rights to the property, and the mortgage lender has placed the property up for public auction.  The property will be listed for sale using resources such as the internet, news paper or other advertisement vehicles. The auction is most likely to be held at a public location in the same county as the property
   
   

Options to prevent foreclosure:

Refinance the loan

Check with a lender to see if there is an option to refinance the loan.  If a homeowner is able to refinance, the interest rate received will be based on the determined by the delinquency in payment of the loan.

List the property for sale

Listing a property can be something that you find a real estate agent to do for you, or something that you can do your self. The real estate agent will work to market or advertise your property for sale. This involves giving interested buyers the opportunity to view the property online or visit the property to see what it has to offer.

Request a forbearance agreement

The mortgage lender and the borrower work out a payment an agreement. The agreement will allow the borrower to miss a number of payments or pay a monthly adjusted amount for a period of time.

Consider a deed in lieu of foreclosure

Allows the borrower to avoid foreclosure and protect their credit rating. Essentially, the borrower hands over the deed of the property to the mortgage lender, and in exchange the mortgage lender forgives any debt on the borrows behalf.