Homeowners can negotiate their own Loan Modification, there is no need to spend thousands of dollars on a third party.
There is a Great Book & CD Kit available to help distressed borrowers through the Loan Modification process. It is a Complete Step-by-Step Guide to the Loan Modification negotiation. The Kit cost less than $100..
It is available at:
Your first step should be to talk with both lien holders, the first and the second. If the borrower have a real hardship and can prove it the banks can try to work something out with you or give you a short sale approval. Only you can know which one is the best option.
Whatever you do keep in communication with the bank. Thru a short sale both banks will settle the debt for less money. Since it is a settlement the impact on your credit will be less than if they have to foreclose the property.
Struggling to make payments is a very common problem for many homeowners in the Phoenix area and around the country. There is a process that lenders follow if you do not make your payment. Nothing is set in stone, but typically after missing 3 months of payments the lender will file a Notice of Default. The Notice of Default starts the foreclosure process.
I have never heard of a lender garnishing someones wages, but that does not mean it never happens. You would be best served to contact an atty if this is of a concern to you.
If would like to stop a foreclosure you may want to consider a Short Sale. Much easier on your credit and would allow you to buy a home again in the next 2 years. Drop me a note and I will send you a Free copy of my book "Should I Short Sale My Home?"