The first step in bank foreclosure is missing a payment. It does not matter why you miss that first payment, but the foreclosure ball starts rolling at that point. Once fifteen days have passed from your missed payment, the bank usually tries to contact you. If you do not talk to the bank, more problems are in store. Forty-five days later, the next step is taken. At this point, you are usually warned, in writing, that you are facing foreclosure if you do not take action immediately. If you allow another thirty days to pass with nothing, the formal paperwork will begin.

There are several steps you can take before the formal foreclosure process begins. All of these, though vary from state to state. In some states, you can file for bankruptcy. Most will allow you to keep your home as a protected asset. There are two types of bankruptcy you can file for. You can have your debts wiped out, or you can have your debts reorganized so you can continue to pay lenders as much as you can while still having money to survive on. Either way, the ability to file for 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 starts is talk to your lender.

Most lenders are willing to work with customers to lower 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. Foreclosures are just as much hassle for the bank as they are heartache for you. The final thing you can do before the formal bank foreclosure process begins is look for resources to help you within your state. Many states have foreclosure prevention associations that will provide you with the resources you need in this difficult time.

We have gotten to the point where many hard working individuals are struggling to keep above water with current debt and responsibilities. The current economical times have put a big strain on many individuals. We still see that there is a great amount of home purchasers receiving notices from their bank or lender that they have defaulted on their mortgage. It is sometimes a no-brainer when it comes to choosing to use income to pay for necessities like food and water before paying the mortgage. It is sometimes a much easier decision to make when the mortgage payment has doubled in amount due monthly. No family should have to make such tough decisions but many have to now look at what this will ultimately lead to.

Once the bank has notified a home purchaser that they defaulted on their loan and that the foreclosure process has begun is when many individuals find themselves lost and with many questions on how they should proceed. One available option in avoiding foreclosure is a short sale. A short sale is when the bank or lender accepts an offer on a property that is less than what is owed on it. In other words a homeowner may owe a bank more on a property than what it is currently worth. The bank or lender must approve and accept an offer as a short pay for the amount that was originally owed.

Some of the basic things looked at by banks and lenders in order to begin the short sale process are that the homeowner has a valid hardship. The bank is verifying that the homeowner is in a situation where they can not or may not be able to make the mortgage payment. This may be due to loss in wages, family member being sick or having an accident or any other reason or combined reasons causing a homeowner to struggle with the mortgage and other financial responsibilities. The bank will also take a full look at your current financial situation. The bank may request anything from check stubs to past W-2 forms. The bank and lenders want to make sure that the current homeowner is in a situation where they can not keep up with all there financial responsibilities.