It is still not too late to save your home if you are facing foreclosure. You have to work out a repayment plan with your lender before they start to file for a Notice of Default against you. The reason is the notice serves as the beginning of a foreclosure proceeding and your choice of response have been severely limited. It is wise to face this problem early on as you can still explore other possibilities.
If you have fallen behind in your monthly mortgage payments, you will normally be given a grace period to bring them back in line. If you can do so, you are still in good standings with the bank. However, if you keep falling behind in your repayments, your lenders may be reluctant to work with you. If you belong to the latter category, do not delay as it is time to take drastic measures to save your credit rating and prevent foreclosure on your home.
Sometimes, it is best to sell your house to salvage the situation. Before doing so, you need to determine the fair market value of your house first. The simplest way to do so is to ask for the opinion of your local real estate agents. You can also check the recent selling price in your local newspapers. You would save some money on the agent's commission if you sell it yourself. However, if the situation has become desperate, a full service broker with extensive network may be able to sell your house faster.
Even if you cannot recover your loan amount from the sale, it is a better option than a foreclosure. In some cases, you or your agent would need to negotiate with the lender to find out if the lender is willing to cooperate on a short sale. This action is also known in the industry as the pre-foreclosure redeemed. However, you must also realize that this short sale will affect your credit ratings.
If all else fails, as a last resort before foreclosure, you may ask the lender to forgive the mortgages. In return, you shall give the lender signed deed-in-lieu of foreclosure. This means that you give the lender a properly prepared and notarized deed. It does not help in safeguarding your credit ratings but you are showing the lender that you are willing to take responsibility in preventing foreclosure.
At the very least, your lender will be willing to work out an arrangement with you to stay in your house until a new one is found. Remember that you negotiate this right even if you are in default. The reasoning behind this is that while the foreclosure is proceeding, you are still the owner of your own home.