The last couple of years have been tough times financially for so many Americans. People across the country are finding themselves in situations they never thought possible, like facing foreclosure. In order to stop foreclosure or avoid it altogether, you should have a clear idea of just exactly what foreclosure is and the steps along the way. An inherent part of a mortgage loan is the fact that your home is collateral against that loan and the lender can take possession of your home to satisfy the loan. If you have fallen behind on your mortgage payments or anticipate having difficulty paying your mortgage due to job loss or other circumstances, you need to understand the foreclosure timeline.

Homeowner default - First, you will need to be 30 to 90 days in default of the mortgage loan before a lender will consider starting foreclosure proceedings. At this point it is an excellent idea to contact the lender before they contact you. Some of the options available to you include discussing a loan modification with your lender.

Lender’s notice of default – The foreclosure process officially begins when a lender sends you a Notice of Default or Lis Pendens, in states requiring foreclosure proceedings be conducted through the courts. This is when you have the most options available to you to get foreclosure help.

Notice of sale – A date will be set for a public foreclosure auction. At the point, you as the homeowner can try to sell the home on your own. If you are not able to do that, one of two things will happen at the public auction. The house will be sold to the highest bidder and the ownership will transfer to the buyer, effectively making you a tenant. Or, the house will not receive a high enough bid and the ownership will transfer to the lender.

Foreclosure – Once your house has gone through a foreclosure sale, your options are extremely limited. Chances are your house has been sold at a public auction and the new homeowner will be making arrangements to take possession of the property. On occasion, the new owner may be willing to rent the house to you, but you would be a tenant, not the homeowner.

Redemption period – In some states, there is a redemption period that allows you to stay in the home a while longer before a notice of eviction will be served. The option of a redemption period and how long it lasts varies from state to state.

Eviction – This is the stage you don’t want to get to. While you do have some legal recourse to allow you a little more time in the house, you have no chance of keeping your home at this point.

Foreclosure prevention begins with a proactive homeowner. Keep records of all conversations with your lender, including the date, exactly who you talked to and what was discussed. Be willing to provide your lender with any documentation that helps your case. Look at all your assets and consider what could be liquidated to put you in a better position to make your loan current. Finally, consider all your options, including loan modification, selling your home, deed in lieu of foreclosure and any government programs available to struggling homeowners.