Pre-Foreclosure

• When you fall behind on your mortgage payments, you begin receiving notices from your lender of pending foreclosure. "A survey by Freddie Mac and Roper Public Affairs and Media found that 75 percent of delinquent borrowers were contacted by their lender, but never responded," reports the United Way. It is essential to address all letters received by your lender during this period. Some lenders send information on mortgage assistance programs to help you determine your options. You may be able to negotiate better mortgage terms that make your loan affordable.
  
  

Foreclosure

• The foreclosure process officially begins with a legal notice from your lender. If none of your lender's mortgage assistance options worked or you didn't receive information on foreclosure prevention, you must research local programs or talk to a housing counselor. The United Way offers a foreclosure hotline to help owners find local resources. For example, in 2010, the United Way administered the Fresh Start program, which gave Georgia homeowners facing foreclosure $3,000 to catch up on their past-due balances.
  
  The U.S. Department of Housing and Urban Development also has a foreclosure hotline. These counselors can help you improve your negotiations with your lender for better mortgage assistance options.
  
  

Housing

• If you determine that no local, private or federal foreclosure programs work for you, you should begin preparation for the looming foreclosure process. Seek rental housing in your area of choice. Since you are no longer making payments on your mortgage, you can set aside money for application fees and deposits on a rental home. It is your responsibility to have all your items moved before the eviction period begins at the conclusion of the foreclosure process. If you are still experiencing hardship, HUD-certified counselors may have access to housing in your area that matches your financial circumstances.
  
  

Post Foreclosure

• After foreclosure, the lender can hold you responsible for paying all, part or none of your remaining mortgage debt. You may receive an immediate deficiency judgment from your lender demanding the remaining sum. However, in some states, the lender can wait until you regain financial stability before filing a lawsuit. If the lender does forgive your remaining mortgage debt, you may be subject to cancellation of debt taxation.
  
  Consult with a tax and legal professional to help you determine how to respond the requests for sums of money you don't have. Filing bankruptcy, proving insolvency or illegal lending practices are all options for alleviating your financial responsibility, but they all require the help of a professional.