It's not easy and it will feel like the end of the world if it happens to you. But Foreclosures are real and they are happening every month. Here are a few pointers if you find yourself facing foreclosure.
1. Talk with the lender on your loan. Explain your situation and see if they have anything they can offer to help. In most cases they do but make sure you are honest with them. They do not want your home back. They want you to keep it. It is better to talk with them if you think you are going to get behind before you do. If you don't get a clear answer wait a day and call back and ask again. Someone will be able to answer your questions. Ask for a loan modification or see if they'll refinance it. Ask if they have a repayment plan or a forbearance period to help you get back on your feet.
2. Search for foreclosure counselors online. You will want to make sure they are HUD approved. It is a long process but it could be worth the fight and headache to save your house.
3. Call a Realtor. Make sure you explain to them whats going on so they aren't caught off guard down the road. A knowledgeable Realtor should be able to guide you in what type of market you are in. If you have equity built up you will get to keep it once everything else is paid if the house sells for more than you owe.
4. Short Sale. A short sale is when you ask the bank to allow you to sell it for lower than what you owe on it. Most of the time they are going to have you find a Realtor to get it going. Make sure that Realtor knows about short sales. You will need to give them written third party authorization to speak on your behalf to the bank and the banks attorney. Don't let the name fool you either. Its a longer process than selling your home outright. The only thing short about it is the amount you owe the bank. You also want to be sure that you will not owe the difference back once it sells. In a short sale the owner can not make any money from the sale of the home. This would be an absolute last resort depending on your situation and the current market. If the market changes this will change as well.
Here is where pride gets in the way. Most people don't want other people knowing whats going on in their life. I understand that. But don't be to stubborn to ask for help. Dealing with banks and attorneys can get aggravating. Just keep on keeping on. It happens and we learn from those mistakes and move on. No one is going to judge you for trying to figure out what to do next so just ask.