There are two basic types of foreclosure, judicial and non judicial. In a judicial foreclosure, the mortgage company files against the borrower in order to obtain a decree of sale from a court having jurisdiction in the county where the property is located. If the borrower is found in default, the court gives them a set time to pay the delinquency, plus costs. If there is no payment, then the court orders a sale.

A non-judicial foreclosure is pursued by the lenders under a 'power of sale' clause that is in the language of most standard mortgage documents. In other words, when you sign a mortgage, you pre-authorize the lender to sell the house in the event of default. Generally the power of sale process involves a notice of sale which is mailed to the property owner more than 25 days before the sale and recorded in the county where the property is located. Notice must be published once a week for three weeks, with the first publication appearing not less than 20 days before the sale, in a general circulation newspaper in the county where the property is located. The notice contains basics including the time, date and place of sale, and a warning that the property is going to be sold.

An attorney involved in this process gives the advice to act early. Call your mortgage company's 'workout department', 'home retention department', or 'modification department' at the earliest moment possible to explore options. The home retention department of a lending institution does just what it sounds like. It tries to help lenders retain their homes. The reason you want to act early is that once the foreclosure process starts, costs start to add up. Publication can cost up to $1,000.00. Attorney fees add up. Costs can reach $4,000 to $5,000 before you realize it.

There are only two absolute defenses to the foreclosure. One, pay all amounts due. Second, if one of the borrowers is in the military, the Service members Civil Relief Act applies. Previously known as the Soldiers and Sailors Act, it stops all judicial proceedings while a member is on active duty and for 90 days thereafter, and offers other protections.

There are strategies for homeowners facing foreclosure where these two options do not apply.

First, as recommended above, call the mortgage company early to avoid things getting worse than they already are.

Second, in addition to calling early, call often. Don't simply wait for a package to arrive from the company. Remember, others are going through the process. You can't afford to sit back passively waiting while your file sits unattended.

Third, bankruptcy may be an option. Due to the snowballing of costs, at the very least, this should be considered very early, rather than kept for a last minute act of desperation.

As the foreclosure attorney I spoke to put it: "If you're underwater, walk away from it." For example, if a homeowner started out with a property worth $200,000 and a first mortgage for 180K, they may have added a second mortgage for 40K. That homeowner is already 20K over the top, before calculating the devaluation of the property in the current market. In that scenario it's not even worth thinking about trying to pay it all off. That's why it may not be bad advice to "walk away from it."