I Watch People Lose Their Homes to Foreclosure Every Week. Here’s What They Did Wrong

 

I’m going to tell you something uncomfortable.

Every single week, I see homeowners in Pierce County and Kitsap County make the exact same mistakes when facing foreclosure.

And those mistakes cost them their homes.

Not because the bank was evil. Not because they didn’t have options. Not because foreclosure was inevitable.

They lost their homes because they made preventable, predictable mistakes—and by the time they called me, it was too late to fix them.

I specialize in foreclosure assistance and short sales. I work with homeowners who are behind on payments, underwater on their mortgages, and terrified they’re going to lose everything.

Some of them I can help. Some of them I can’t.

The difference? The ones I can help called me when they still had time. The ones I can’t waited until they were 30 days from auction.

So if you’re reading this and you’re facing foreclosure—or you think you might be headed there—I’m going to walk you through the seven mistakes I see over and over again.

These are the patterns that cost people their homes.

Don’t be one of them.

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Mistake #1: They Wait Too Long to Ask for Help

This is the big one. The mistake that kills more options than anything else.

Here’s what I see every week:

Homeowner gets the first Notice of Default. They’re scared. They’re embarrassed. They think “maybe it’ll get better.”

They don’t call anyone.

Three months later, they get the Notice of Trustee Sale. Now they’re panicking. They Google “stop foreclosure” at 2 AM. They finally reach out.

But now the auction is 90 days away. Maybe 60 days. Maybe 30 days.

And all those options they had back when they got the first notice? Gone.

Here’s the reality:

• At 120+ days before auction: You have EVERY option available (loan modification, short sale, deed in lieu, traditional sale if you have equity)
• At 90 days before auction: Short sale is still very doable, but you need to move FAST
• At 60 days before auction: Short sale is a coin flip—banks are slow, and you might not get approval in time
• At 30 days before auction: You’re probably screwed unless the bank agrees to postpone (rare)

The people who save their credit and avoid foreclosure? They call me at 120+ days.

The people who lose their homes? They call me at 45 days and hope for a miracle.

What to do instead:

The SECOND you get a Notice of Default or Breach Letter, pick up the phone.

Call a HUD-approved housing counselor (free). Call a foreclosure attorney. Call a real estate agent who specializes in short sales (me).

Don’t wait until you’re desperate. Desperate has no options.

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Mistake #2: They Avoid the Bank

I get it. The bank is calling 6 times a day. You’re stressed, you’re embarrassed, you don’t want to talk to them.

So you let it go to voicemail. You throw away the letters. You pretend it’s not happening.

This is the worst thing you can do.

Here’s why:

The bank’s “loss mitigation department” has one job: avoid foreclosure if possible. Foreclosures cost them $50K-$100K in legal fees, property maintenance, and resale losses.

They’d rather work with you. But if you won’t talk to them, they have no choice but to foreclose.

Here’s what actually happens when you avoid the bank:

• They assume you’ve abandoned the property
• They assume you’re not interested in any alternatives
• They move forward with foreclosure because they have no reason not to
• By the time you DO engage, you’ve lost all your leverage

What to do instead:

Answer the phone. Talk to loss mitigation. Even if you can’t make a payment right now, engaging with them keeps doors open.

Tell them:

• “I can’t afford the current payment, but I’m exploring my options.”
• “I’m working with a real estate agent on a possible short sale.”
• “I need more time to figure out what I can do.”

Just stay in communication. It matters more than you think.

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Mistake #3: They Think a Loan Modification Will Save Them (When It Won’t)

Loan modifications work for some people. But not most people.

Here’s what I see:

Homeowner gets behind on payments. Bank offers a loan modification. Homeowner spends 4-6 months submitting documents, chasing bank reps, resubmitting the same paperwork 12 times.

Six months later, the bank denies the modification. Now the homeowner is 60 days from auction and has no backup plan.

When loan modifications work:

• You had a temporary income disruption, but you’re back on your feet
• You can legitimately afford a reduced payment going forward
• You want to keep the house long-term
• You have TIME (6+ months before auction)

When loan modifications don’t work:

• Your income hasn’t recovered
• You’re still underwater (owe more than the house is worth)
• You can’t actually afford even a modified payment
• You’re already close to the auction date

The problem? Most people who apply for loan modifications fall into the second category. They WANT it to work, so they convince themselves it will.

What to do instead:

Be brutally honest with yourself:

• Can you actually afford a modified payment long-term?
• Even if the bank lowers your rate, can you realistically keep this house?
• Do you WANT to keep this house, or are you just scared of the alternative?

If the answer to any of these is “no” or “I don’t know,” don’t bet your entire foreclosure strategy on a loan mod.

Have a backup plan. Like a short sale.

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Mistake #4: They Don’t Understand What a Short Sale Actually Is (And Why It’s Better Than Foreclosure)

Most people have never heard of a short sale until they’re facing foreclosure.

So when I say “we should do a short sale,” they look at me like I’m speaking a foreign language.

Here’s what a short sale is:

You sell your house for less than you owe on the mortgage. The bank agrees to accept the sale proceeds as full payment and forgives the rest.

You walk away with no mortgage, no foreclosure on your record, and significantly less credit damage.

Why short sales are better than foreclosure:

• Credit Impact: Short sale = 2-3 year recovery. Foreclosure = 7-10 year recovery.
• Future Mortgages: Short sale = eligible for FHA loan in 2-3 years. Foreclosure = 7 years minimum.
• Control: You’re actively selling the house. You’re not waiting for an auction date like a guillotine.
• Stress: Way less traumatic than foreclosure.

But here’s the catch:

Short sales take time. You need 90-120 days MINIMUM to get bank approval and close the deal.

If you wait until 60 days before auction, you might not have enough time.

What to do instead:

If you’re underwater (owe more than the house is worth) and you can’t afford the payments, start the short sale process IMMEDIATELY.

Don’t wait for the loan modification to get denied. Don’t hope the market suddenly bounces back. Don’t assume the bank will postpone the auction.

The earlier you start, the better your chances of getting it approved and closed.

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Mistake #5: They Try to Do It Themselves

I see this constantly.

Homeowner thinks “I can just list my house for sale and the bank will accept whatever offer I get.”

No.

Short sales are not normal real estate transactions. They require:

• Specific paperwork the bank requires (hardship letters, financial statements, BPOs)
• Negotiation with the bank’s loss mitigation department
• Coordination with the foreclosure timeline
• Backup plans if the first offer falls through
• Knowledge of what banks will and won’t accept

Here’s what happens when people try to DIY it:

• They list the house but don’t submit the right paperwork to the bank
• They get an offer but the bank rejects it because it’s too low
• They miss deadlines because they didn’t know what they were
• The auction happens before the deal closes because they didn’t build in enough time

And then they lose the house anyway.

What to do instead:

Work with a real estate agent who specializes in short sales. Not just “does short sales sometimes.” Specializes.

We know the process. We know what banks require. We know how to negotiate. We know how to get deals approved and closed before the auction.

Yes, you’ll pay a commission. But that commission comes out of the sale proceeds—you don’t pay it out of pocket. And if the short sale gets approved, you walk away with no mortgage debt.

DIY-ing a short sale to save a commission is like doing your own root canal to save on the dentist bill. Technically possible. Horrible idea.

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Mistake #6: They Don’t Have a Backup Plan

This is the one that breaks my heart the most.

Homeowner puts all their eggs in one basket:

• “The loan modification will get approved.”
• “The bank will postpone the auction.”
• “The market will go up and I’ll have equity.”
• “My financial situation will magically improve.”

And then it doesn’t. And the auction date arrives. And they have nowhere to go.

Here’s the truth:

Facing foreclosure means you need MULTIPLE strategies running simultaneously:

1. Apply for a loan modification (if it makes sense for your situation)
2. Start the short sale process (as a backup if the loan mod fails)
3. Save money (stop paying the mortgage if foreclosure is inevitable and bank every dollar for your next place)
4. Figure out where you’ll live next (start looking at rentals, talk to family, make a plan)

You don’t just hope for the best. You prepare for the worst while working toward the best.

What to do instead:

Ask yourself: “If the auction happens and I lose this house, what’s my plan?”

If you don’t have an answer, THAT’S your priority. Not hoping. Planning.

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Mistake #7: They Let Shame and Embarrassment Paralyze Them

This is the invisible mistake. The one nobody talks about.

Homeowners facing foreclosure feel:

• Ashamed they “failed”
• Embarrassed to ask for help
• Afraid of judgment from family and friends
• Convinced they’re the only ones going through this

So they don’t tell anyone. They don’t ask for help. They suffer in silence until it’s too late.

Here’s what I need you to hear:

You are not the first person to face foreclosure. You won’t be the last.

Foreclosure happens to good people who hit rough patches:

• Job loss
• Medical bills
• Divorce
• Death of a spouse
• Unexpected financial disaster

None of those are moral failings. They’re life.

The people I help successfully navigate foreclosure? They swallow their pride, ask for help early, and take action while they still have options.

The people who lose their homes? They let shame keep them frozen until it’s too late.

What to do instead:

Right now, today, tell ONE person what you’re going through.

A family member. A friend. A professional (housing counselor, attorney, real estate agent).

Break the silence. Ask for help. You’ll be shocked how many people either went through something similar or know someone who did.

You’re not alone. But you’ll feel alone if you don’t reach out.

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So What Should You Actually Do If You’re Facing Foreclosure?

Alright, enough about mistakes. Here’s the action plan.

Step 1: Figure Out Where You Are in the Timeline

• Have you missed payments? How many?
• Have you received a Notice of Default?
• Have you received a Notice of Trustee Sale?
• What’s the auction date?

Your timeline determines your options.

Step 2: Decide What You Actually Want

Be honest:

• Do you want to KEEP the house? (Loan modification, repayment plan)
• Do you want to MOVE ON? (Short sale, deed in lieu, traditional sale if you have equity)

Don’t try to keep a house you can’t afford just because you think you “should.” That’s how people end up in worse situations.

Step 3: Get Professional Help IMMEDIATELY

• HUD-approved housing counselor (free): 1-800-569-4287
• Foreclosure attorney (consultation usually $200-$500)
• Short sale specialist real estate agent (that’s me—no upfront cost)

Don’t wait. Don’t try to figure it out alone. The earlier you get help, the more options you have.

Step 4: Engage with Your Lender

Call them back. Tell them you’re working on a solution. Stay in communication. It matters.

Step 5: Execute Your Plan

• Loan modification? Submit documents ASAP and follow up relentlessly.
• Short sale? List the house immediately and start the bank approval process.
• Moving on? Stop paying the mortgage, save every dollar, and plan where you’ll live next.

Do NOT just hope and wait. Hope is not a strategy.

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The Bottom Line

I watch people lose their homes every week.

Some of them had no options. Medical disaster, total job loss, complete financial collapse. Those are tragic and sometimes unavoidable.

But most? Most had options. They just didn’t use them in time.

They waited too long. They avoided the bank. They bet everything on a loan mod that was never going to get approved. They tried to DIY a short sale. They had no backup plan. They let shame paralyze them.

And they lost their homes.

Don’t be that person.

If you’re facing foreclosure—or you think you might be—take action TODAY.

Not next week. Not after you “think about it.” Today.

Because every day you wait is one less day you have to execute a solution.

And time is the one thing you can’t get back.

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Let’s Talk About Your Situation

Look, I’m not going to sugarcoat this: I can’t save every house, and not every situation has a good outcome.

But I CAN tell you what’s actually possible given your timeline, your equity situation, and your financial reality.

If you’re behind on payments, underwater on your mortgage, or staring at a foreclosure notice, let’s have a real conversation about your options.

No judgment. No pressure. No sales pitch.

Just honest advice from someone who’s helped dozens of families navigate this exact situation in Pierce County and Kitsap County.