In some states, there will be 50% more foreclosures in 2008 than there were in 2007. And, last year was a record year.

But the actual foreclosure is something that happens toward the end of the steps of foreclosure. In between, many homeowners are able to save their homes.

There are six steps of foreclosure

First, if you fail to make a mortgage payment or two, you are in danger of facing foreclosure.

People can fail to make mortgage payments for a variety of reasons. Historically, failing to make mortgage payments has been a result of major medical problems, lost job, and family emergencies have been the reason for most mortgage failures.

But recently, the number one reason for homeowners not making their mortgage payments have been exploding adjustable rate mortgage rates.

The second step is for the lender to send out a Notice of Default. The NOD gives you official notice that the legal proceedings have started.

When you get a NOD, you need to get in touch with the lender right away. Open up the lines of communication. In this manner, when you move on to step three, you have a good chance of actually saving your home.

Next, you have a period of time – anywhere from 45 to 180 days to make up the deficiency. You can make up the deficiency in a number of ways:

1. Pay back the arrears
2. Enter into a short sale
3. Discuss the possibility with the lender of a Deed in Lieu of Foreclosure
4. Sell the house if it’s worth more than you owe
5. Change the terms of the mortgage

If you are able to make up the debt, your problem goes away.

If not, it’s on to the next step: foreclosure. This is the legal taking of the house. This can be done either through judicial or non-judicial means, depending on the state.

At that point, the next step is to have a Sheriff’s Auction. The sheriff will auction off the home on the steps of the county courthouse. Usually, the bank buys the property for $1 over the amount of the deficiency, though sometimes investors get involved.

In most states, the final step is to offer the original homeowner the option of buying the home back from whoever won the auction. This is called the redemption period.

If you are looking to save your home from foreclosure, it is useful to know what the steps of foreclosure are and what you should be doing during each one. That way, you won’t be another number in 2008.