Avoiding the Steps Leading to Foreclosure. - By: Scott Staudt

The process of foreclosure usually creeps up on a borrower in a sneaky way for most homeowners. Most people think they will find the time and the money to do something about it. But understanding how the foreclosure process flows will help the borrower avoid it.

First of all, the borrower misses one month's payment payment. Usually a notice or letter advising of the due date will be sentout. If, as is frequently the case, it was a question of timing, the borrower should get the mortgage out as fast as possible. If he still is not able to he should let his lender know as soon as he can.

If the borrower misses another payment, the lender will usually make direct contact. At this point, the lender does not know if there is some problem with the borrower, such as sickness, which may prevent him from paying. Do not ignore or avoid this call. The lender is still very willing to make arrangements.

The third month in a row that the mortgage is not paid will mean it is officially in default. This will prompt a more official notice, usually by certified mail. This kind of letter is usually called a "demand letter" or a "letter to accelerate" and when no effort is made to pay or make some arrangements, the lender will usually begin foreclosure.

This is typically the point when most borrowers have given up, but the lender is still willing to try to come to an agreement.

So when the fourth month without a payment goes by, the lenderwill "call" the terms in the letter to accelerate. This means lawyers, and of course that adds even more to the amount due to the bank. Now the home will be listed with the sheriff's for sale.

The official date of the home foreclosure is this sale date. The lender posts the notice on the house, in a newspaper and by letter to the borrower. Until the actual date of the sale, the borrower still has time to make arrangements, but the outstanding balance has now been growing.

You may have noticed one common element in each of these steps. That until the very last instant, there is the time and the possibility to negotiate a solution with your lender. This is the only means to stay out of foreclosure; to stay in close and constant contact with your lender about the payment of your loan.

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