December 8, 2009

While it is still a devastating situation, it is unfortunately becoming a very common one that can happen to anyone. Taking heed of the following advice may help prepare you to stop home foreclosure before you become a statistic.

1. Pay your mortgage, and pay it on time. That may sound like a ridiculously obvious tip, but many people do not realize what a powerful impact being just one month behind has on your credit rating. One missed payment will not cause foreclosure, but it may well cause you to dig a hole you will have difficulty climbing out of later.

2. Contact your lender immediately if you anticipate missing a payment. Given the steadily rising rate of foreclosure in the United States, many financial institutions have implemented policies and/or programs to grant struggling homeowners a little leniency. These include:

•  Loan Modification

• Refinancing

• Debt Forgiveness

• Repayment Plans

• Forbearance

3. If you cannot keep up with your mortgage and cannot work out a plan of action with your bank, you will need to sell your house. Unfortunately, the real estate market in most areas has deflated to the point that your house may no longer even be worth what you owe on it. If this is the case, and you cannot afford to absorb the loss, you will need to consider a short sale. This is when the lender agrees to accept a lower offer for the sale of your home, but with a list of contingencies.

Short sales, loan modifications, and other attempts to stop home foreclosure are very complicated matters which contain a great deal of legal "ifs," "ands" and "butts." If you are facing the possibility of losing your home, contact a real estate attorney who can guide you through the confusion and frustration.

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