This article isn't just for those who received a notice of foreclosure. If you've missed some mortgage payments, or even if you haven't missed one yet, but feel it's just a matter of time before you start short paying the mortgage or skipping it altogether, please read on. Remember that banks are in the business of lending money and getting paid back that money plus interest. They are not in the business of owning real estate. Banks have many incentives to work really hard to keep real estate owned and non performing loans to a minimum.

The first step is to talk to your lender. Lenders are more likely to work with you early in the process. You'll have more options such as working out different payment terms either temporarily or even permanently. Lenders refer to this as a loan modification or "loan mod". Some lenders may modify your payment schedule or even allow you to skip payments and add these amounts to your loan balance for you to pay off over time.

Even if you've missed a payment or two and are receiving late notices, don't ignore them. They won't go away, and will only escalate. Take a deep breath and don't be afraid to talk to your lender. You may have lost the chance to permanently modify your loan, but you may be able to work out a different payment schedule on a short term basis or have late penalties forgiven.

If you've evaluated your situation and just don't believe you can make regular monthly payments even at a lower amount, then you may want to consider selling the property yourself. A pro of this option is that you keep a foreclosure off of your credit report. Another pro is that you conserve some cash assuming the rent you'll be paying instead is substantially less than your monthly mortgage payment. Find a realtor who is experienced and successful at sales in your neighborhood. Be open to the realtor's advice about getting the home ready for sale and their recommendation for the selling price. This may be tough to hear, but focus on getting yourself out from under the near term financial stress. You may even want a realtor who's experienced with short sales. Short sales occur when the homeowner sells their property for less than the loan amount, and may be the case since home values have most likely dramatically dropped since you last had the home appraised for loan purposes. If you go the route of selling the property yourself, you still need to be communicating with your lender particularly with a short sale because some lenders may not accept this. You may also still be liable for the deficiency, and need to understand and plan for this.

Another option is for you to turn over the deed or give back the property to the lender in exchange for forgiveness of the debt. This is known as a deed in lieu of foreclosure. Again, this takes negotiation, and may not relieve you of deficiencies between what the bank sells the house for and what you owe including the original mortgage, penalties, legal fees, and other costs.

Many people consider bankruptcy if they can't make their mortgage payments. A Chapter 13 bankruptcy will stop foreclosure proceedings, but will also be reported to the credit reporting agencies. Mortgages are one of the types of debt that survive a bankruptcy which means the debtor is still liable for the outstanding balance, so filing for bankruptcy will not relieve you from repaying the mortgage.

This is more of a delaying tactic than one of resolution, but requesting the foreclosing bank to "produce the Note" may delay the foreclosure process because it's a homeowner's right to see the bank note. Since most mortgages were bundled and sold to servicers and investors, a lot of the paperwork is "lost". This doesn't stop foreclosure, but may give you time to explore other options.

You're already doing the right thing by educating yourself on your options. If you find yourself unable to make your mortgage payments, again start by talking with your lender to discuss short term and long term payment options. If that's not optimal for your situation, consider selling the property yourself. If you feel you need an advocate, investigate references for a real estate attorney or financial advisor with an expertise in foreclosures.