More often than not I have attended the auctions representing the foreclosing bank.
In most instances, the person losing his or her home has recently lost a job and experienced a temporary "dip" in income.
Don't let the temporary dip in income cause you to lose your home; especially if there is equity in the home.
The first thing you should do is contact your lender to see if you can defer certain payments until the end of the loan.
Many local lenders are willing to do this due to the costs associated with foreclosing on property.
Lenders face court costs, attorney's fees and potential loss of principal and interest should your home not sell at auction to cover these amounts.
Remain calm if your lender is not willing to defer payments and insists on continuing with a foreclosure lawsuit.
In most states, a homeowner has at least three months once a case is turned over to a lawyer before the property is scheduled for auction.
Do not ignore paperwork sent to you by the bank's attorney hoping a judge will accept the explanation "I never received it."
It has been my experience that this excuse fails 99 times out of 100 and makes the homeowner lose credibility. Continue your job search.
Once a lawsuit is filed you have a certain number of days to respond. In most states that number is 20 days.
Be sure to respond to the lawsuit with any meritorious defenses you may have on the last possible date.
Once you respond, the bank's attorney can no longer file for a default judgment.
It will take the bank's attorney at least 30 days from the date of your response to obtain a judgment.
In most states, an auction on the property cannot occur less than one month after judgment is obtained.
Once the property is finally set for auction consult a bankruptcy attorney about filing bankruptcy.
Filing bankruptcy at any time prior to the auction will automatically stay the auction until the bankruptcy court has had an opportunity to review the matter.
More often than not, a bankruptcy attorney will allow you to catch up the delinquent payments over time. This will be done in an Order of Adequate Protection.
Post Judgment Discovery
If you decide not to take the Bankruptcy route and a judgment is entered against you, make sure you respond to all of the post-judgment discovery.
Failure to do so could end up in additional attorney's fees and costs.