What do I do if the bank is foreclosing my house and I can't make payments?

This is a very unfortunate situation to be in and sadly, very common among several Lenders for the past couple years. It is in fact true that it is proving much harder than touted to get approved for the magic loan modification and also true that unless and until one is actually approved (and even if you are in the process of being reviewed), if you are in default and it's going on a long time, the Lender is well within it's rights to still proceed under the promissory note to foreclose. Legal, but not logical or fair. But here are 3 important things to know: 1) the foreclosure process is very long and can often take over 4-6 months before it truly got to the stage of selling your house at the court house steps; 2) there are different stages of foreclosure so if you only got a letter as opposed to a civil summons and complaint, then it is even earlier in the stages - you should have an attorney review the letter to confirm what it actually is, and 3) Go to http://www.ncforeclosureprevention.gov/ which may help you out of your situation.

What you are experiencing is called dual trackingone department of the bank leading you to believe it is working on modification while another department proceeds with foreclosure. Under the latest revisions to the federal HAMP laws, dual tracking is illegal. However HAMP may only apply to certain types of loans. It is not possible to help you any further in this forum. You really should talk to an attorney experienced in this area.

Mortgage companies can and will continue with the foreclosure process while you are in the modification process. In order to protect yourself, follow the modification instructions to the letter AND file an answer in the foreclosure process as well. Part of your answer should detail the progress made in the modification. Consult with an attorney ASAP to make sure you are taking the proper steps in the foreclosure. If your county has a foreclosure mediation program, enroll in that as well.

You can appeal the modification amount. They cannot "dual track" your modification and foreclosure. If your are not working, then this is all moot.