The first and most important step in getting your bank to work with you is communication. If you want to keep your house then you must tell the bank what is going on, why you are behind, and how you would like to try and bring your loan current. There are a lot of simple ways people use to bring their loan current in the first stages of foreclosure.

Since we are in the tax season, some people use their tax returns to bring their mortgage current. You can also search other places that you may be able to pull a lump sum of cash from in case of an emergency. For example, I have seen families use an advance on an annuity, in some cases you may be able to use funds from an IRA or a child’s college fund if you explain to you IRA administrator or the college fund that the funds are needed for an emergency, although you may be subject to some stiff penalties. The most common way to bring your mortgage current is to talk to the bank and ask them if you can make a repayment agreement.

A repayment agreement is an agreed upon payment plan between you and the bank which allows you to pay a little bit more than your normal mortgage payment each month until you have paid the full amount of money that you were behind on. This plan is usually best for someone who has had a temporary setback and they just need help getting back on their feet.

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Understanding the mortgage foreclosure process can help you if you want to save your home or if you are interested in buying property before it goes to the foreclosure auction. Each State has its own mortgage foreclosure laws and so you need to find out exactly what applies in your State.

However, there are two basic types of foreclosures:

• Judicial foreclosures
• Power of Sale foreclosures

In State that use judicial foreclosure laws this means that a lender has to go through the Court system to get a non-paying homeowner out of their house. This usually takes longer then a non-judicial foreclosure. Power of Sale foreclosures are based on the terms of the mortgage agreement and often can happen quite rapidly.

Generally what happens after your mortgage payments are 60 to 90 days behind is that a lender will have to send you a “Notice of Default” and provide you with the opportunity to reinstate your mortgage. At this point it is usually often difficult to reinstate a mortgage if you do not have equity in the property. During the time period when you failed to pay the mortgage, additional fees have accumulated in addition to interest, so now you owe significantly more than your last balance.

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