If a home owner cannot make their mortgage payments as scheduled and falls behind, the mortgage lender can take back the subject property and sell it via legal channels as stipulated in the note of the mortgage loan contract.So, it’s very important for every home owner to understand how foreclosures work.Foreclosure proceedings can be initiated by the mortgage lender if the home owner lags behind his or her mortgage payments. Foreclosure is the legal route mortgage lenders take to repossess your home. There are voluntary foreclosures and involuntary foreclosures. Read on to get the answers to all of your foreclosure questions.Voluntary Foreclosure FAQA voluntary foreclosure is a foreclosure where you just turn in your keys to the mortgage lender. If you can negotiate terms with the mortgage lender that if you turn in your keys, they will not go after you for the deficiency, that is known as a deed in lieu of foreclosure. If the lender grants you a deed in lieu of foreclosure, the mortgage lender will not come after you for a deficiency judgment. A person can qualify for a 20% down payment conventional mortgage loan if they have a deed in foreclosure in just two years.Involuntary Foreclosure FAQA involuntary foreclosure is when you fight the foreclosure to the end and the sheriff comes over and throws your belongings out. Most folks leave before they have a sheriff’s eviction. The mortgage lender can come after you for the deficiency and a judge can impose a deficiency judgement on you. Most mortgage lenders do not come after foreclosure deficiency judgements.Foreclosure FAQ On Foreclosure ProceedingsThere are ways of avoiding foreclosure proceedings. I strongly recommend that you contact your current mortgage lender and explain your situation. The mortgage lender does not want your home and will do everything possible to work things out with you. Explain them your current situation whether it is a loss of a job, sickness in the family, or divorce. The mortgage lender will want all of your current financial situation such as your gross monthly income and your monthly expenses.Forbearance FAQ Your mortgage lender might give you a 3 month or 6 month forbearance where they can add your delinquent payments to the back of your mortgage loan. Or they might want you to just pay property taxes and insurance and give you a break on the mortgage payments.I strongly recommend that you contact your mortgage lender prior to you being late with your mortgage loan. You will be surprised how much your lender will want to work with you if you contact them while you are current with your mortgage payments.Your mortgage lender might even offer you a mortgage loan modification where they will decrease your monthly payments.Short Sale and Pre-Foreclosure Sale FAQ You may qualify for a preforeclosure sale or short sale to avoid full foreclosure by selling your home for an amount that is less than your mortgage amount. Many lenders will work with you on short sales because they do not want to hold your home on their books.Deed In Lieu Of Foreclosure FAQDeed in lieu of foreclosure is when you turn in your home keys to the mortgage lender and the lender agrees not to sue you for the deficiency. This method is better than a foreclosure because you will avoid a deficiency judgement. On a deed in lieu of foreclosure, you will not be liable for back taxes.FHA Program FAQ If you have a FHA insured mortgage loan, the mortgage lender can probably assist you to receive a one time assistant program from the FHA mortgage insurance fund. The requirements to receive this one time payment from FHA insurance fund is that you must be late at least 4 months on your FHA mortgage loan but no later than 12 months on your monthly payments. You need to show proof that once you receive this one time payment from FHA that you will no longer be past due on your mortgage payments. You must sign a promissory note with FHA that allow HUD to put a lien on your home for the amount you have received from the FHA insurance fund. The amount given to you is an interest free loan but not for free. The money needs to be repaid when you refinance, or sell your home.