One of the major indicators that a household is going through a severe financial storm is when they are facing the prospect of home foreclosure. The first sign of dooming foreclosure is when the family is behind on the payments. If this scenario is happening to you, it would help to know that there are several alternatives that could save your home from being foreclosed. These include the following:

Workout Agreement between You and Your Mortgage Lender

Usually, such an agreement is used by homeowners who have little or no equity on their houses. The agreement could be accomplished through a hired professional however hiring someone's services would mean another unplanned expense on your part. Thus, it is easier to go directly to the mortgage lender and negotiate. The negotiation normally ends up with selling the house instead of foreclosing it. The proceeds may not be much and may only suffice the balance on your mortgage payments but are enough to save you from foreclosure.

Reinstating Your Current Loan

This option is available for people who can pay lump sum payments to their mortgage lender to pay off the default. This works best for homeowners who can guarantee that they can pay off the total balance within 24 months along with their regular mortgage fees.

Reinstatement Options:

a. Total Reinstatement This type allows the homeowner to accomplish all due payments including all assessed costs and charges to bring the loan current.

b. Mortgage Modification This involves the alteration of the current mortgage plan into another plan that will suit the financial capacity of the homeowner which may include the extension of the number of payments to give more time to the homeowner to pay off the entire balance and/or increase in the loan balance. This process requires the approval of the bank though and any expenses incurred during the process plus the extra charges that may be caused by the additional requirements covered through the process will be added to the entire balance.

c. Repayment Plan This option requires the homeowner to pay the total amount of all delayed payments over a specific period of time. The homeowner is required to pay anywhere from 30% to 50% of the total arrears that include total balance for all late payments, attorney's fees and bank fees.

All these options are designed to help save yourself from foreclosure and its inherent damages. Please contact a professional for more comprehensive information on each option.

Most people think that banks are happy with foreclosing homes and the current state of the property market .  In reality , they would rather have your regular cash payment than to undergo the meticulous and laborious process of foreclosing your house. So if you are facing foreclosure, the best initial move you can take is to contact your bank and establish an agreement that would be beneficial for both parties. Banks are in the business of lending money , not foreclosing on your home.

Banks and mortgage lenders have numerous financial assistance programs that are designed to limit the possibility of foreclosing a real estate property. Considering that you have been religiously paying your dues on time, there is no reason for your bank not to allow you to use their financial assistance programs and back-up plans that will save your mortgage payments from later default.

An arrangement could be made to help you keep up with your bills without having to sacrifice your house to foreclosure. However, this can only happen if you have an open connection with your lender and if you demonstrate enough interest in saving your house. Thus, on the first sign of problem be sure to inform your lender right away and anticipate that changes should be made on your payment terms.

Get into the details  and make it a point that your bank or mortgage lender knows the specifics as to why you weren't able to keep up with your mortgage payments. Reasons like severe sickness in the family, job loss or death in the family are excusable and could be considered as justifiable reasons. Also, some lenders have programs that are aimed at these specific problems.

There are other alternative options that you could use if you want to avoid foreclosure including forbearance, mortgage modification, mortgage or loan refinancing and reinstatement. All these require major modifications on the mode, terms and conditions of your mortgage payments.

Most lending institutions today prefer the process of a Non-Judicial Foreclosure since it doesn't have any complications or legal proceedings attached to it. Simply put, this kind of foreclosure is between both the lender and the borrower.

What is a non-judicial foreclosure?

Non-Judicial Foreclosure is a type of foreclosure without any court intervention. As defined above, this kind of foreclosure is simply between the lender and the borrower, or other persons with connections to the transaction like a mortgage broker or a financial adviser.

When the mortgage has reached its maturity date and the borrower has yet to fulfill the payment of the debt, then the lender will send a Notice of Default informing the borrower that the deadline for the said mortgage has elapsed.

If the borrower did not comply with the Notice of Default then the lender may now issue a Notice of Sale to the borrower, auction houses, and public notices that the property is now foreclosed and will be sold to the highest bidder, usually in cash equivalent.

Notice of Default

Once the borrower has failed to pay the debt within the said deadline then the lender will issue a Notice of Default to the debtor. The notice states that the recipient of the letter has not paid their dues in the stated deadline. The letter will also contain a small extension of the deadline for the debtor to pay the obligation.

If the payment is not made within the deadline stated in the notice, then the lender may issue a Notice of Sale to the borrower, the public, or to those connected to the transaction that the property is now foreclosed and is open to a public auction.

A Trustee Sale Guarantee will be requested by the trustee from a title company; the TSG will give assurance to the various liens and encumbrance against the property. The TSG will also contain the parties to receive the Notice of Default.

The 3-months Reinstatement Period

Before the Notice of Sale is issued to the borrower and to the concerned public, a reinstatement period of 3 months is stated by law for the borrower to reinstate the loan. During this period, the borrower may communicate directly with the lender to try to either extend the loan or to pay it in full to avoid a foreclosure.

Notice of Trustees Sale

During this 21-day publication period, a Notice of Trustees Sale will be issued indicating the place and time of the actual auction of the foreclosed property. The notice is usually published in the local newspapers or in public notice areas. The Trustees Sale will also contain information about the foreclosed property as anything in it that the trustees wishes to auction off to pay the debt.

After the 21-day period, the property is now eligible to be sold in public. The property will be auctioned off to the highest bidder. But 5 days prior to the date of sale, the borrower may reinstate the loan or postpone the sale if he or she deems it necessary.

Time Frame

It is important to know the time frame for the different processed of a non-judicial foreclosure; this will give you an important edge either in reinstating the loan or trying to catch up with the payment deadline.

The Notice of Default (NOD) will be issued once the maturity date of the loan is reached and the borrower did not pay any of the obligations owed. When the NOD is mailed off to the concerned parties, a 3-month reinstatement period is given as an opportunity for the borrower to renew the mortgage to avoid the foreclosure.

After the reinstatement period, a 21-day publication period of the Notice of Sale is sent of to the newspapers to inform the public of the auction time, date and place. The Trustees Sale will contain all the information of the said auction; this includes the time, place, information on the property and all other assets within it that is auctioned off.

After 5 days prior to the published sale date, the borrower will have another opportunity to reinstate the loan or pay off the remaining debt to avoid the foreclosure of the said property.