No lender wants to foreclosure on a mortgage as the foreclosure costs them more money than they can make back from the foreclosure sale. Thus, the lenders do not foreclose to make money, but only as a way to limit losses on a defaulted loan. If you get behind on a payment, your lender will usually try to work with you to device a practical plan to cure the default and bring the loan current. You must stay in communication and be honest with your financial situation when it comes under evaluation.
The willingness of the lender to work with you will depend on your past payment record. If you’ve been consistent with no serious defaults, the lender may be more receptive. If you fall behind on payments, or may so in the immediate future, there are some steps to take before talking with the lender about alternative payment arrangements.
First, you need to prepare a monthly list of your income and expenses, using realistic figures based on your current financial situation. You will also need to complete a financial disclosure package, showing your assets and liabilities, including all debts and monthly payments and when they are due. Pay stubs, unemployment check stubs or other proof of income should be in the package, along with 2 years’ tax returns. Get an estimate of the value of the property. You should be able to get a local real estate broker to give you an idea of the current market value, free of charge. Prepare a written explanation of your situation for the lender and offer any plan or suggestion you have to make the loan payments brought to current.