The great American Dream of homeownership is what many in the United States diligently strive after. While homeownership brings a host of benefits, no one will argue that you take on an equal amount of responsibilities when you purchase your home. In the current real estate market, becoming a homeowner may come with little or no cash investment for what used to be a traditional down-payment of about twenty percent of the sales price of the home. The loan that is obtained by a first time homebuyer is usually a special loan designed to assist those at entry level, or those buyers who have not yet accumulated a substantial sum for the down-payment.

Banks will always prefer to lend to a borrower that has more money to invest for a down payment. Usually, the desired amount is at least ten or twenty percent of the purchase price in the form of cash. Almost without exception, the banks or mortgage lenders will make special loans with very little or no down-payment to a homebuyer because the loan is usually insured or guaranteed against loss of principal by a governmental or quasi-governmental agency.

Unfortunately, first time homebuyer loans are usually the first loans that go into default in an economic downturn. Financial hardships caused by either loss of a job, accident and/or injury, chronic illness or relationship problems can turn the long sought after American Dream into a nightmare. Although in a normal economy, there are very few people that actually end up losing their homes, those in the midst of the foreclosure process can find themselves in such emotional, as well as financial, turmoil that many do not see themselves successfully resolving the problem they have gotten into.

The following information is shared in the expectation that it will provide a path for those embroiled in this very difficult situation, and assist in providing information in order to resolve their particular financial problems. While the exact foreclosure timeline varies from state to state, for the most part general guidelines are applicable throughout the nation.

What You Can Do to Avoid or Stop the Foreclosure Process

The first and most important step that one can take in preventing the loss of one\'s home through the foreclosure process is to \"communicate, communicate, communicate\"! Your objective is to immediately speak to your lender and inform the lender of the situation. This first step, along with a few others, is detailed below.

Negotiate with the lender

The lender will always work with a client of theirs if the client takes the initiative to communicate any financial hardships that may have caused the default. Try to negotiate with the lender for a payment adjustment in order to make up for the missed payment or payments. It is imperative that you act quickly in order to prevent the sale of your home, because once the foreclosure process begins you only have 120 to 140 days before your house is sold. Contact your lender to explain your situation and work out a way for you to keep your house. By acting quickly you have the most time and the best chance of being able to negotiate a solution before the trustee files the notice of default. If foreclosure has already begun you must contact the lender during the 90 day period before the notice of trustee sale is posted and filed.

One of the most common causes of failure to communicate is that many homeowners facing foreclosure avoid contacting their lenders because they are upset or embarrassed. Many times the homeowner mistakenly believes the lender will not help them because they feel that the lender prefers to foreclose. In reality, the opposite is true. Banks and other lenders are primarily in the business of earning money by collecting interest on loans that they have made. Their net income is derived by having a specific process in place in order to invest and receive the interest payments. They find it cumbersome to go through the foreclosure process, and usually are not well equipped to manage foreclosed properties.

Because of this, most lenders are willing to work with homeowners because foreclosure are much more costly for them in the long run. It forces them to allocate time and resources to an unprofitable activity. Contact your lender immediately! Do not ignore phone calls and letters from your lender. If you do not inform your lender of your situation, it will be will assumed that you do not intend to pay and the legal process will go forward.

It is important to prepare well before you contact your lender. You must gather all documents supporting your income and expenses, as well as all loan account information. When you call, ask to speak to someone in the customer service department. Be upfront and honest about your circumstances and be prepared to discuss your financial situation in detail. Your lender needs to know clearly your financial situation in order to determine whether they are able to offer a solution.

Your lender should be able to then offer you one of the following options:

Loan modification: this is when the lender agrees to modify the terms of the loan. As an example, the lender may agree to extend the term of the loan or lower the interest rate of the loan. This option helps you catch up on unpaid payments by making your monthly payments affordable. Loan modification may be appropriate if you have recovered from a financial problem and can afford to make your loan payments if they are adjusted.

Repayment plan: This option allows you to catch up on unpaid payments by adding a portion of the late payments to your regular monthly payments. A repayment plan may be suited for you if you have recently recovered from a short- term financial problem and are now able to resume making your regular monthly payments but need time to catch up on the unpaid payments.

Reinstatement: This is when you are able to pay off the entire balance of the unpaid payments by a specific future date. Reinstatement may be appropriate if you know and can prove to your lender that you will soon be receiving a quantity of money that will allow you to bring your loan account current.

Forbearance: This is when the lender agrees to temporarily reduce or stop your loan payments with an agreement on another plan to bring the loan account current. This option stops the foreclosure process and is combined with other options, often reinstatement.

If you are uncomfortable negotiating with your lender by yourself or if you want better understanding of what options you have, contact a reputable foreclosure assistance counseling agency. When selecting an agency to work with, choose one from the U.S. Department of Housing and Urban Development\'s list of approved housing counseling agencies. Beware of phony \"counseling agencies\" that approach you with the promise to advise you on your situation, provided that you pay a large fee for services you may very well be able to accomplish yourself!

Borrow money from family or friends

Many people tend to shy away from this as their first option. One would think that this option would be the most common-sense place to start. Many people completely eliminate this as a means to gather the funds necessary to bring the loan current simply because they are embarrassed to ask. They do not want family or friends to know that they have encountered financial difficulties, so they look elsewhere. Family or friends many times are the ones that are most committed to lending a helping hand. If they are able, they are very likely to be very willing to help out. Oftentimes because of a homeowner\'s embarrassment, they are not approached until it is too late in the foreclosure process, and are unable to obtain funds quickly enough to help out. Obviously, there are situations where the homeowner\'s family members or friends are not approached because there are already strained relations, or they want to avoid causing any discomfort to their inner circle of friends or family.

One of the best things that I can recommend to you is that you approach the request for assistance in a very businesslike manner. By that I mean, you should look to secure their interest just as you would expect if you were the one providing the funds to someone else in trouble. The greater degree of security that you can offer them in protecting their funds, the greater probability of successfully obtaining the funds necessary to stop the foreclosure.

Borrow from institutional lenders

A third option is to borrow from institutional lenders to bring up back payments. This can be done by refinancing, or simply by borrowing against the equity in the home. These lenders will primarily consider equity when determining approval of a loan. Equity is defined as the difference between the fair market value of the home and what is owed on the mortgage. Refinancing is when you take out another loan in order to pay off the existing mortgage. When refinancing to avoid foreclosure, you may be able to obtain a lower interest rate, a longer payment period, and/or a lower monthly payment which would make your mortgage payments more affordable. Usually lenders that become aware that you have fallen behind in the mortgage payments will shy away from lending to you, so if you expect to borrow from an institutional lender, you must act very quickly before your credit reflects any late payments. If the lender is aware that you are in default, they will probably refuse to lend, or offer a loan with much higher interest rate to account for the borrower\'s inability to meet their financial obligations.

Borrow from private party lenders

There are individuals that have funds to invest and are looking for a higher return on their investment than can be obtained by depositing their monies with savings institutions. These individuals are expecting a high rate of return on their cash investments, and understand that the loan that they are funding is a high-risk loan or is often referred to as a \"hard-money\" loan. Usually, once the homeowner falls behind in their mortgage payments, it is increasingly difficult to borrow money. These private lenders usually consider the equity in the property when making the loan. Because the borrower is behind in their payments, the lender cannot look upon the borrower\'s ability to repay in a timely manner as the primary basis for qualification. The lender looks for the security of their investment to the ability to recover it based on the property\'s market value and what is owed by the borrower on the property. Almost without exception, these loans carry a much higher interest rate ( usually beginning at around 14 percent) than the normal home loans obtainable at banks or other lending institutions. They are, however, many times the only option left to a homeowner in foreclosure.

Sell the Home

Many times, the best solution for someone that has fallen behind in their payments is to sell the home, and thereby recoup 100% of their equity minus selling costs. Unfortunately, many homeowners get caught up in the emotions of the hardship and overlook the realities of their financial circumstances. Almost as if with blinders on, they stagger about hoping for a magic solution, sometimes waiting until it is too late to come up with a rational plan. If a homeowner can reasonably assess their finances and determine that they cannot carry the financial load, they might be much better off selling the property and preserving the bulk of their equity until they are again able to become homeowners.

However, they must act quickly so that their credit is not ruined by the failure to make their mortgage payments on time, or by using the bankruptcy process just to forestall the sale of the home. Don\'t let your equity be eaten up by the high costs inherent in loans made to those in distress. Sell the home and preserve the most important or valuable part, namely the equity!

File for Bankruptcy

There are two chapters dealing with personal bankruptcy; Chapter 13 and Chapter 7. The main difference between the two chapters is that Chapter 13 helps individual debtors pay off their debt with court supervision and protection while Chapter 7 eliminates, or in legal terms, liquidates, the debtor\'s debt. Based on this simplistic definition alone bankruptcy may seem like the simplest and best solution to your financial problems. However when considering filing bankruptcy be aware that it is not an action that simply frees you from your debt, it is a complex legal process that has weighty financial consequences. For most debtors it is not the best option and should be considered as a last resort after all other options have been investigated or attempted. Individual financial circumstances are so different that you should seek the counsel of a financial planner or accountant and a bankruptcy attorney in order to discuss your particular financial situation and the implications of a bankruptcy. If you do not have an established relationship with an attorney, I would recommend that you get two or three opinions.

No doubt, unfortunate circumstances are likely to befall many of us as we go through life. One should keep in mind that you can protect your financial health by being proactive when these problems occur. As long as you act quickly and take steps to preserve your assets, you should be able to avoid going into foreclosure. Even if you are unable to avoid foreclosure, following these guidelines should minimize the pain of the process. Seeking assistance promptly from professionals in taxation, law, and real estate will improve your chances of handling the process with a much better outcome than if you try to handle the process solely on your own.

Get Help Here

A person\'s home is certainly one of the most important aspects of their living and their family\'s living. Unfortunately, many people have been losing their homes as of late due to the immense amount of foreclosures that have been occurring. Even homeowners who have not missed their payments on their house loan in years have lost their homes due to being laid off or some other major financial mishap. The thought of losing your home is likely one that is frightening in a sense as well as stressful. Luckily, there are numerous ways to stop home foreclosure if you are in this situation.

Many homeowners who will receive a foreclosure notice from their lender will immediately give up hope of solving this problem. The truth of the matter is that the only way to lose your home in a foreclosure is to do nothing or to give up hope. For many homeowners who are working to stop home foreclosure, the answer to their problems could be as simple as contacting their lender and talking things over. Homeowners who wish to keep their houses will work to make deals with their lenders. These deals can work to benefit both parties. For instance, you may be able to obtain a reduced interest rate from your lender through one of these dealings. The extension of the existing payment plan is also a common option that lenders will give homeowners who are working to stop home foreclosure. Lenders are more willing to negotiate than most people think. Lenders are especially willing to work with the homeowners who have had a good payment history with them. Lenders and homeowners can usually come to some compromise and even a new agreement if they can sit down and talk about the ordeal. It\'s that simple if you try this option.

There was once a time when you would not see people stopping their foreclosure, especially with a simple chat. As of late, an increasing number of people have been able to stop their home foreclosure and save their home. If you are in the situation where your home is being or may be foreclosed on, there are other courses of action you can take aside from talking with your lender. Many people have taken to hiring foreclosure negotiators to help them with the process. These negotiators will know the best course of action for handling a particular home foreclosure.

A stitch in time saves nine. If you acted in time, Foreclosure Prevention is quite in your reach. But the action that you take needs to be a meticulously crafted one with such a recipe that is based on fundamentals of sound economics. I am sure it must have crossed your mind that so much of planning is not for you. It is only natural for you to say this given the fact you are already under enormous stress facing foreclosure. But come to think of it. No financial planning was ever easy in this world. And neither is planning to prevent foreclosure nor was owning that home.

Well, the answer to this lies in many factors and many of them bear on you after all it is your home you dreamt of. Your financial troubles have not started over night. You knew before hand that foreclosure was imminent. It is this time you need to treat as an opportunity if you want to get out of this slap. Here are a few steps you can take to help your self.

Keep cool. Panicking only does more harm. Do not vacate your home as long as there is no sign of an eviction order. This can deprive you of some qualifications like one time payment grant from FHA insurance. Visit your lender and talk to the officer that deals with your case. There is a fair chance of him seeing a point in your request if you have a plan of action to recovery. Lenders are not in the business because they foreclosed many a home in the past. They might agree to give you a chance.

You need to work out many options simultaneously. If you are sure your position recovers in a year or two you can seek a refinance and a real estate broker might just help you with this. You can work out a remodeling of the debt, you can do this with your lender’s help. Both of you together can figure out a new practical budget with reduced monthly payment. Looking at your current financial position, the lender may even grant a grace period estimated on your frank admission and confidence level. You no longer need to pay during this period when you are attempting to turn around. They call it forbearance in their parlance. This is allowed at lender’s discretion based on your mortgage delinquency being not more than 12 months.

United States Department of Housing and Urban Development can pay the lenders if they file for partial claims. You will be required to sign an interest free promissory note in order to availing this.

If you do not see you making a turn around or no help is coming your way, you can not keep your home. You have to recognize that financial assistances call for some path to recovery. If such a solution is far from sight then it is advisable that you sell off your home. Because it can at least prevent you from a foreclosure suit. A real estate agent from your local area with an impeccable record can not just sell it for you but fetch a good value to see you will not face a deficiency suit.