Foreclosure - What to do?

Many people avoid the problem of home foreclosure, not realizing that proactive measures can save your house. Let's face it, it's embarrassing to be behind on your mortgage, but don't let embarrassment cause you to lose your house. Remember the mortgage holder doesn't really want to foreclosure on the home. Foreclosure is expensive and in today's market usually means that the lender is going to lose money. Furthermore foreclosures can have network effects driving down home values throughout a neighborhood. If a lender has additional loans out there it can adversely affect their portfolio. So here are some steps you can take

• Face the problem.
  This means immediately calling your lender when you know you cannot make your payment. Most people never bother to call the lender, treating it like a credit card vendor you are behind on. The vendor owns the majority stake in your home. Treat them like a partner, not a creditor you would rather avoid.
  
• You have options.
  You may have some options including negotiating a repayment plan, requesting forbearance and asking to restructure the loan.
  
  Under a repayment plan, a lender will give you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period, you will have paid back the delinquent amount.
  
  In the case of a forbearance, the lender will temporarily allow you to pay less than the full amount of your mortgage payment and may even exempt you from paying anything during the forbearance period.
  
  Typically you qualify for forbearance if you can prove that you'll be getting funds from a bonus, a tax refund or some other source that will let you bring the mortgage current at a specific time in the future. You may also qualify for a forbearance if your income has dropped temporarily.
  
  
• The environment has changed.
  When the real estate market was red hot, lenders were less likely to restructure or work with borrowers. Now that the market has cooled lenders are much more likely to work with home owners. Lender don't want to be in the realty business.
  
  
• There are non profit options.
  For example the Homeownership Preservation Foundation, a nonprofit organization based in Minneapolis, has established -- with a lot of funding from lenders -- a toll-free hotline at 1-888-995-HOPE (4673), available in English and Spanish. You can also get information by going to http://www.995HOPE.org.
  

There are options out there to avoid foreclosure, you just need to find them and face the problem.