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Foreclosure is defined as "Legal process by which a mortgagor of real property is deprived of his interest in that property due to failure to comply with terms and conditions of the mortgage." In layman's terms that means you lose everything, namely your house! This can be particularly distressing if a buyer has been faithfully meeting their monthly payments but has fallen on hard times due to a loss of job, unexpected medical bills or other extenuating circumstances. Is there anything that can be done to prevent the lender from taking possession of the house? What if you have to miss a payment, fall short of a full payment or miss several payments?

Step One: Think Logically

For starters, don't let pride stand in the way of you and your dream house. Your first reaction might be to give up, assuming that since you have violated the terms of the contract, there's nothing more than can be done. However, you do have options. If you know your payment is going to be late, then immediately contact your lender and let them know the situation. Contact them before they have to call you and if it gets to that point, never ignore the lender's letters or phone calls.

There are a few different options for helping homeowners in a tight spot. If your problems are only temporary, such as one missed payment, or a payment that falls short of the minimum amount due, then you could request one of three things: (1) Reinstatement, which is an option requested of the lender that allows the borrower to reinstate the plan provided he or she can pay a lump sum to catch up their past due payments by a specified date; (2) Forbearance, which is similar to reinstatement, but it allows the borrower to delay payments with the promise to bring the account back to current by a certain date; (3) Repayment Plan, which allows the borrower to continue to make regular payments and catch up the past due amount by by adding it to the term.

Another option is that you can request assistance from the Federal Housing Administration and have a one time payment made by the FHA Insurance fund. The rule here is that you must be at least four months past due, but not more than twelve months past due, and you must be able to prove you are making regular payments again. HUD then puts a lien on your property for the amount you receive. While it must be repaid (either upon pay off or if you sell the house) this emergency loan is interest free. There are also other agencies you can contact that offer HUD-sponsored

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