With all the talk of inflation, housing affordability, layoffs, and stagnant wages lately, another troubling statistic has been quietly getting worse, and it’s the current foreclosure rate, which is starting to grow again.

It hit a low point in 2021 shortly after COVID, mainly due to the foreclosure moratorium, which was responsible for a large part of the inflation we’re currently facing today. But that’s a topic for another day.

Unfortunately, foreclosures have been growing steadily since the end of the moratorium, and we're at about 185,000 filings, but that doesn't compare to anything like what we saw during the 2008 crash—yet. In 2010, there were 1.7 million filings, so that's quite a bit of difference, but we're already up almost 300% from 65,000 in 2021 just 3 years ago.

And when you factor in the challenges we’re all facing in today’s economy, it’s clear that the problem is going to get worse before it gets better, so it’s important for homeowners to understand how the foreclosure process works and what to do if they find themselves facing foreclosure.

How does the foreclosure process work from a homeowner's perspective?

Typically what happens is a homeowner misses a few payments and then the lender starts sending notices. When you start to get those notices, it's so important to reach out to the lender immediately and see what opportunities they have to help you because they’re going to continue moving forward otherwise.

Eventually, if payments continue not being made, the lender will file a notice of default, and every state's a little different, so you might get 30 days, or maybe up to 90 days depending on your state before it goes to a sale. At that point, you’ll need to work within those dates with the lender to try and get it modified before a sale is finalized.

It’s also important to remember that the employees on the other end of the line are people just like you, and they have little to no control over the process or decisions, so while you’re facing a significant challenge in your world, try to show them as much grace as you can muster. Plus, doing so may even help improve your chances of success here. Every ally you can find helps.

What should someone do if they find themselves in a place where they can't afford to pay their mortgage?

The first thing is to breathe. It's a hard situation, but the reality is the lenders have so many programs that the government supports, so typically on the statement that you're getting from your mortgage lender, there's information on who to call. If you don't have that information, you can search on the internet.

There's a Hope mortgage line (an FHA/HUD-specific government program) that you can call for guidance and assistance, and if you’re a veteran, you can reach out to the VA, or go to your JAG office if you're active duty military. So there are a lot of resources that may be able to help get your loan modified, allowing you to catch up if you want to stay in the home. (To find a HUD-approved housing counselor near you, call 800-569-4287.)

It’s also important to make sure you’re dealing with the correct, official agencies, because there are a lot of scams out there that prey on homeowners in crisis. You should never have to pay for these programs because they are already taxpayer funded.

But if you don't want to stay in the home, then it's time to start talking to a real estate agent or even a real estate investor about selling it as quickly as possible.

How effective is communicating with your lender when it comes to saving your house?

Lenders have a lot of systems and processes in place, and so it's not necessarily like you're just going to talk to the first person and they're going to understand the situation and solve it for you. You're not going to call them up and say, “Hey, I need help,” and they're going to help you immediately.

You might have to call two, three, or four times, and talk to three or four different people, say the same thing three or four times, and negotiate back and forth for weeks or even months. And like many companies these days, most lenders rely on virtual assistants who work overseas, so you may also have a language barrier to contend with too. But eventually, if you're persistent, you will likely get the help you need.

What is the point of no return?

The day of sale is the official “point of no return.”

If you find yourself in a situation where you can’t negotiate a deal that works for you and the lender, or if the lender won’t respond, you may need to seek legal counsel. I’ve run into this myself while helping people with this exact issue—despite the fact that I knew exactly what I was doing, I even occasionally got stonewalled for various reasons. But once my attorney drafted a letter, everything started moving a lot more smoothly.

Attorneys have tools at their disposal that you don’t, which may be able to delay or stop the foreclosure process.

It’s critical to remember that in all cases, once the sale is complete, you're done. That's it.

A final note…

Bottom line—don’t stick your head in the sand or rely on wishful thinking. The sooner you take action, the more likely you are to get a favorable outcome. My advice is to be aggressively proactive, detail oriented, and persistent.

This is the key to saving your home.

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Lori Greymont is a seasoned real estate investor, creator of the hit TV show, Funding Faceoff, and founder of a private mastermind community with the mission to help 5,000 real estate entrepreneurs get their real estate deals done and create true financial freedom.