If you are a foreclosure victim who is facing foreclosure, then you have to save this article. Foreclosure happens when multiple payments are missed on a house loan. Generally, after missing 3 or more payments, your bank will implement the foreclosure process. Once the the foreclosure process has begun, you will only have 3-6 months to avoid a sheriff's/trustee sale. This is when the home is sold at auction to the highest bidder.

This instructional information was created to help the average homeowner save their home, without any special training and without hiring a professional stop foreclosure expert to help.

Unfortunately, they don't allow us to write enough here to give you complete guide, so I am making this the "lite" version. If you want the entire guide, you can download it for free from my website or by visiting my profile on this site!

To keep things simple, I've labeled each step of the process, 1 - 10. A ten step process seems logical enough and most people can finish ten steps, without getting into too much trouble.

This guide is not intended for people who can afford to employ a loss mitigation company. In every scenario, we recommend using an expert if at all possible. Using a seasoned negotiator will not only increase your chances of saving your home, but it can save you $100,000's over the life of the loan. The difference between a good modification and a bad modification can cost the foreclosure victim over $1000 every month! If you can afford to hire an expert, always do it! This should be used for people who do not have the funds to employ an expert and need to take action themselves, rather than losing their property.

Ok, here is what you've been waiting for!

Step #1 - figure out what stage of foreclosure you are in and how much time you have until the auction.

This can be determined by either communicating with your lender or the county court that is hearing the foreclosure process. Alternatively, on our website, you can find a foreclosure time line for each individual state. This should help you understand how much time you have to prohibit the foreclosure.

Step #2 - Immediately lower your budget.

Steps 1 and 2 should happen right away, as soon as you know you're going to fall behind. You need to immediately drop every single unnecessary expense from your household. No more cable tv, i-tunes, dvd rentals, etc... Every single cost while you are risking foreclosure should be a life or death necessity. Most families have over $500 a month in excess spending that is unnecessary. Your only necessities should be food, shelter, utilities, and those expenses needed to keep your employment.

Step #3 - Raise and earn as much capital as you can.

When you're behind on payments, you not only need to stop extra expenses, but you need to start hording and earning as much money as possible. Use craigslist, ebay, and your local newspaper to sell off household items, such as extra furniture, cars, collectables, guns, and other extra household items you can live without. You should also be attempting to stay extra hours at work. Looking for a second job or odd jobs is also a good idea, so you can earn extra income.

Step #4 - Attend every court case to contest the foreclosure and ask for more time.

If you are in a judicial state, your case will be heard in front of a judge. You should be disputing the foreclosure and requesting additional time to prove your hearing. There are many legal defenses that you can use to delay foreclosure on your own, but simply asking for more time each time your case goes to court (with a legitimate reason) will prolong the foreclosure process. This will allow extra time to save money and negotiate with your bank. Go to my profile and look at other articles to learn about these legal defenses. If you are in a non judicial state, you should be asking for this extra time or extension with your lender, rather than the court.

Step #5 - Contact your bank on a regular basis.

Staying in contact with your servicer is key to preventing foreclosure. Keep very careful records on every conversation and ask for the full name and employee number for every person you communicate with.

Step #6 - Organize your financial statement showing income and expenses.

The very first thing you will need to show to your bank is your income and expense statement. Your bank has access to your credit report and will request your bank statements, so never lie about this data. You will also need to prepare the last two months of pay stube and your hardship letter. So get these items ready so you can send everything the same day your bank requires them.

Step #7 - Know the current value of your house.

In order to sufficiently negotiate with your bank, you'll need to know the current market value of your property. This value is used to determine how much money will be lost if the bank decides to continue the foreclosure process. You will need to get a property valuation with comparables, an appraisal, or a Broker Price Opinion (BPO). This portion of the process is imperative when attempting a short sale, workout plan, or loan modification.

Step #8 - Talk to your servicer about a loan modification, short sale, or deed in lieu.

This step needs be taken very carefully, because if you submit your deal the incorrect way, you could get turned down permanently. Before requesting a loan modification, you need to review your personal records, property value, and hardship documentation, to verify that you meet the qualifications.

Step #9 - Follow up on everything and request everything in writing.

No matter how meaningless the conversation, or even if you never talk to a single person, you need to keep detailed records of every time you talk with your bank. Any agreements that are made over the phone should be immediately confirmed in writing. Fax and email are the best way to quickly get the agreement confirmed in writing.

Step #10 - Do not miss a payment or deadline.

Once your bank has approved a repayment plan or modification, it's imperative to always pay the payment on time. If you miss a payment, this could end the agreement. You also have to verify that you send all documents back to your bank the same day you receive it. Fill everything out completely and return it immediately by fax, email, or Federal Express. Follow up any digital/mail communication with a phone call to verify it was received. Also verify all payments are received on time and applied to your account, if you mail them.

Hopefully this advice has been helpful and you now have a better understanding of the foreclosure process. If you require more assistance, don't be afraid to request it. There are many websites like ours that provide lots of free advice and help to people who are behind on payments and need to avoid foreclosure!