If you have fallen behind in your mortgage payments and the bank has started the foreclosure process---do something about it.
One option to consider is asking the bank about possibility of a Short Sale on your home.
Suppose that you purchased a $320,000 house in 2007 and got a $280,000 mortgage on the property. There's a chance that real-estate prices in some areas (California, Florida, Nevada, Arizona) have dropped by more than 25%---That means your house is now worth only $240,000. Even if you have made a years worth of mortgage payments, you still owe ~$280,000 on your house that is only worth $240,000!
Call up the bank, ask to speak to the loss mitigation department (This works best if you're a few months behind in your mortgage payments), explain to the loss mitigation department your financial difficulties, and ask to get their OK to pursue a short-sale. This means that the bank will let you find a buyer in the marketplace who will buy the house for a value less than the outstanding mortgage balance. (Say $225,000 in our example).
This means, (1) you don't get foreclosed on (2) The bank doesn't want to own properties--they want to own loans that are paying off---The bank is better off b/c they never take possession of the property (3) The new home buyer is happy b/c they get a home at a fair price.
Call up your bank---Ask for a Short Sale
It is very important to understand that a Short Sale is always the better option if you are facing foreclosure. A Short Sale will not do as much damage to your credit as a foreclosure, which helps you recover by moving on with your financial future faster.
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