The foreclosure process varies significantly from state to state, with some states making foreclosure relatively easy and others making it more difficult. In most states, foreclosure is a legal proceeding which requires a mortgage company to file a lawsuit against you for foreclosure on your property. This process also requires the creditor to serve the homeowner with a “notice of right to cure default” prior to the creditor proceeding with legal action for foreclosure. Since I am not sure in which state you live, I cannot tell you whether or not the actions that your mortgage holder has taken are proper or not. To learn more about the foreclosure laws in your state, see the Bills.com foreclosure page.
One option to potentially stop the foreclosure of your home is to work out an agreement with your lender to lower the interest rate on your loan and rework your payment schedule. If you are interested in working out such an arrangement with your lender, you need to contact the lender as soon as possible to discuss its policies regarding restructuring loan agreements to avoid foreclosure, and what specific options the lender can offer you to stop the foreclosure of your home. You may find that your lender is willing to work with you to prevent foreclosure, as the current downturn in the housing market has resulted in a record number or foreclosures and huge losses for lenders; many are doing whatever they can to prevent their loans from defaulting and going into foreclosure.
Another option that may prevent foreclosure is a Chapter 13 bankruptcy filing. A Chapter 13 could bring your loan current and allow you to pay your delinquent mortgage balance over the course of several years. However, if you wish to keep your home, you will be required to make your regular monthly mortgage payments each month in addition to your Chapter 13 payments. If you are already struggling to make your regular mortgage payments, a Chapter 13 may only delay foreclosure, not actually prevent it. If you are considering filing for bankruptcy protection, I strongly encourage you to consult with a qualified bankruptcy attorney in your area to determine what solution is best for your situation. Bills.com offers a wealth of information regarding bankruptcy and its alternatives.
The most important piece of advice that I can offer you is to communicate with your mortgage lender. Based on the information in your question, some confusion seems to exist as to the status of your loan. If you do not know exactly what action your lender is taking against you, you will not know how to best address the problem. For more information for consumer struggling with their mortgage payments, I encourage you to visit the Bills.com mortgage page.
I wish you the best of luck in resolving your mortgage trouble, and hope that the information I have provided helps you Find. Learn. Save.