An increasing number of homeowners behind on their mortgage and facing foreclosure are finding solutions to sell despite the large inventory of homes for sale in the current market.

Their solution is called “short sales”. Short sales are similar to regular home sales except an agreement is reached in which the lender accepts what the house is appraised for or what it will currently sell for instead of what is owed on it. try to get your home marketed everywhere to sell it, even on foreclosure lists where investors are looking at potential purchases.

So a buyer who wants to pay the current market value of the home buys it from the homeowner, and the lender absorbs a loss on the difference.

With foreclosures rising to three times what they were over a year ago, lenders are more motivated to do a short sale because they at least get most of what they are owed.

Homeowners benefit too as don’t get the worst derogatory there is on their credit report which is a foreclosure. However, sellers don’t receive any equity from the sale. Although lenders absorb a loss on the money they’re owed, a short sale lets them avoid a costly home foreclosure which can sometimes cost between $30,000 to $50,000 per house in legal, marketing, and expenses not to mention advertising. A short sale will get a home off the lender’s inventory , (also known as bank repossession list) and typically costs a lender less than a foreclosure by nearly $20,000.

To be considered for a short sale by the lender, homeowners must prove they can’t pay their mortgage because of some type of hardship such as loss of job, medical expenses, death of a spouse or, in some cases, just too much debt such as an adjustable rate mortgage resets.

A homeowner’s credit score does decrease significantly but not as much as a foreclosure.

As an example, a homeowner involved in a short sale could realize a 80 to 100 point drop on their credit score. Experts say a foreclosure is around 250 to 280 points

Even when short sale is complete, homeowner aren’t out the woods, they will also have a tax hit to Uncle Sam. The tax hit is the difference between what a homeowner owes and what the bank receives for the house, and it is treated as income. This taxable income will show up on form 1099 from the lender for the homeowner. Therefore, it is recommended that you consult with a CPA or tax attorney.

Some alternatives if you want to keep the house are: 1.) you can try to rent it to a family or individual which hopefully covers the mortgage or a great portion of it; or 2.) get a Foreclosure Bailout Loan if you are close to foreclosure and short sale is not working.

Frank Collins is a editor and contributor with LoanShoppers.Net and Jumbo Mortgage Loans

For the homeowner who has missed a few mortgage payments the foreclosure process can start very quickly. During this stressful time it is critical you promptly take action to stop the foreclosure process and try to save or sell your home. Keep in mind that no one will help unless you ask. So, if you want to stop a foreclosure, you need to take responsibility and get the process moving as soon as possible.

Do Nothing

Exercise this option and eventually the sheriff shows up and escorts you to the sidewalk along with all your personal belongings.

Leave In The Middle Of The Night

You can run but you cannot hide. Decades before the “Information Age” a person may have been able to move across country and start over. Today more than ever before the practicality of heading for parts unknown is simply impractical. Aside from the difficulty in disappearing you may be breaking several laws as well.

Ask Family and/or Friends For Help

A small percentage of homeowners may be able to find help this way, yet their pride and embarrassment for getting into this situation in the first place prevents them from reaching out. Another consideration is the people you ask may not have the extra financial resources to help.

Negotiating With The Bank or Lender Yourself

Your lender is willing to stop the foreclosure process. That is a fact. All lenders hate foreclosing. Mortgage lenders typically lose money when they foreclose, since most foreclosed homes are worth less than the value of the mortgage. Plus, the foreclosure process is expensive to manage and is stressful for everyone. The problems facing most homeowners in handling the negotiation themselves is a lack of understanding regarding their rights and responsibilities, effective negotiating skills, and the amount of time involved. You are likely already consumed with scraping together funds wherever you can in the hopes of bringing your mortgage payments up to date. Where will you find the time to work with the bank or lender? This option is doable, but it is like swimming against the current. Eventually the pressure is going wear you down and just make the situation worse.

Hiring a Foreclosure Prevention Service

If you do decide to hire a firm, since negotiating with the lender to find the best solution is complicated and time consuming, practice due diligence and shop around. Depending on your situation and who your mortgage lender is, the subtleties of negotiations are critical to a successful outcome. You need someone who is experienced at foreclosure negotiation. The company that will help you stop foreclosure should present you in a way that convinces your lender that you are a responsible person and that you are capable of developing a plan and getting back on track.

The company you hire typically negotiates with the lender to repackage the loan so that the borrower can become current again. It will help save your credit, keep you in your home or sell your home, and appease your lender. This process has to happen pretty quickly, and could involve one or more of the following:

Loan modification – If you can currently make your regular payment, but you can’t catch up with the past-due amount, the lender folds any past-due amounts, including interest and escrow, into the unpaid principal balance. This new amount will be re-amortized over a new period of time.

Payment forbearance – Here you are allowed to pay the overdue amount, plus penalties and interest, over a specified period of time.

Deed in lieu of foreclosure – This is where you are unable to pay for the house and you voluntarily give the house back to the lender. Be warned that you still have to pay back any difference between what you owe and what the house resold for. Not every lender will always accept this arrangement.

Sell your house – Some people exercise this option if they do not want to keep the home. Most homeowners want to keep their home and often choose this option if all else fails and they want to save their credit.

File for bankruptcy – This should only be used as a last resort because of the negative impact on your credit (up to ten years in some states). Keep in mind also filing for bankruptcy is much more difficult these days due to new laws recently passed.

In the end, there are a variety of considerations when you try to avoid foreclosure, so educate yourself and plan for the best resolution to the foreclosure process.

SaveMeFromForeclosures.com is a leader in the foreclosure prevention industry. We offer solid information, consultation, and strategies to assist the homeowner in avoiding foreclosure. We offer tailor-made options and suggestions based on your unique situation. Get onboard today with right company to help you with stopping foreclosure. Visit our website or call us at 1-888-472-8380 for a no-obligation consultation.

This is Part 2 of my article on the “Secrets to Stop Foreclosure.” In Part 1, I discussed the secrets of how to communicate with your lender and how to find the appropriate person at the lender’s office. In this article, I’ll discuss the secrets of finding someone with authority at your lender’s office, getting your files organized, and learning to understand the foreclosure clock.

A. Find Someone With Authority to Stop the Foreclosure

As you develop a strategy to stop your foreclosure, the secret is to be in close contact with someone at your lender’s office who has authority to stop the foreclosure. Don’t waste your time negotiating with a lower-level collection person who has little interest in your hardship or the reasons you are not making the monthly payments. All he wants to know is when you are going to pay. The secret here is that collection personnel have no authority to negotiate with you or stop your foreclosure. You need to find someone with authority. Here is another secret. If a collection person calls, politely say goodbye and hang up. Then call the main office of your lender. Ask for the names of the branch manager and the senior loan officer. When you get the information, thank the person you’re spoke to, and hang up again. Wait one hour, call back and ask for the branch manager or senior loan officer specifically by name. Once you are connected, request an appointment. If you can’t get through and no one returns your call, send a letter. Be sure you send a copy to the president of your lender. Wait several days and call again. Sooner or later, you’ll reach someone with authority. This is the person you will want to meet with.

B. Get Organized

It is important to gather together all the documents that relate to your property and your loan. In a typical real estate transaction, you signed a purchase contract, escrow instructions, a promissory note, and either a mortgage or deed of trust. Organize and review as many of these documents as you can in order to understand how the foreclosure process applies to you. Here’s what you should get:

• Copies of the promissory note, mortgage or deed of trust,

• Copies of all documents and letters in your escrow file (contact the escrow company or title company that handled the purchase of your property to get copies).

• A “property profile” which contains information on all documents recorded against your property. You can obtain a free copy of a property profile from the title insurance company that originally insured your purchase of the property. Also ask the company for copies of all documents recorded against your property in the county recorder’s office.

• Copies of all letters you sent to and received from your lender, along with the envelopes the letters from your lender came in, if you have them.

• Copies of your monthly mortgage statements, loan payment stubs, or any other billing and payment information.

• Copies of all foreclosure documents you’ve received, if any. Also save the envelopes of documents you’ve received, if available. Label one file folder for each group of documents and put them in the folders in chronological order. You will refer to these documents again and again as you fight your foreclosure.

C. Learn the Clock

Foreclosure involves very specific timetables in which notices must be carefully served, mailed, recorded, posted, and published before your lender can legally foreclose.

Foreclosures can be conducted either judicially or nonjudicially, depending on your state. You need to know which type lenders in your state use. Each kind of foreclosure has its own procedural rules, so you need to know whether you are facing a judicial or nonjudicial foreclosure. Here are the particulars:

Judicial foreclosure. Most foreclosures of mortgages are judicial. This kind of foreclosure starts when your lender files a lawsuit in the court in the county in which your property is located. You must be served (provided with) with a copy of the Summons and Complaint for foreclosure. A judicial foreclosure can take anywhere from one to two years.

Nonjudicial foreclosure. Most foreclosures of deeds of trust are nonjudicial. Your lender avoids the court system entirely by having a trustee (a third party who conducts the foreclosure) follow a specific series of notice procedures, then sells your property at a public auction. A nonjudicial foreclosure can take anywhere from three to four months depending on your state.

Knowing the foreclosure clock is another secret to successfully stopping your foreclosure. Once you understand the time constraints within which you are working, you can customize a strategy that fits your particular situation. For example, if you have two to three months until the foreclosure sale, you still have time to bring your loan current, negotiate with your lender, or refinance your property. On the other hand, if you have less than a week before the foreclosure sale, your only option may be to file for bankruptcy. Remember, the secret is that these time periods are for your benefit–not your lender’s. This is your opportunity to apply a strategy that can most effectively stop the foreclosure.

This article was written by Lloyd Segal. Lloyd is a mortgage banker, attorney, and author of “Stop Foreclosure Now.” His new book helps homeowners understand the foreclosure procedures in their state and develop strategies to stop the foreclosure. More on his book can be found at http://www.ForeclosureWorkshop.net

In today’s market, foreclosures are on the rise. We see reports in the news daily about the rising rates of foreclosures across the country. According to Bloomberg, Fannie Mae Chief Executive Officer Daniel Mudd said “the housing slump will last beyond next year, dragging down home prices and increasing credit losses. We don’t think we hit a bottom until the end of ’08 and then we have some period of time to work our way back up again.”

Many industry experts put the blame on “subprime” lending but we are now seeing homeowners with “prime” lending loans also facing foreclosure. A financial downturn can occur to anyone at anytime. If you are in financial trouble and cannot make your mortgage payments you have options. You don’t have to lose your home.

The good news is that lenders do not want your home, they want your money and the profits from your interest rate. If you are facing foreclosure act now by asking your lender about the following options:

Loan Modification

A loan modification permanently changes the terms of the original note. Mortgage loan modification may include decreasing interest rate, re-amortizing the remaining balance, or extending the term of the loan. Loan modification is also referred to as a workout or restructure. One of the biggest advantages of loan modification over alternative foreclosure options is that the interest rate can be modified to lower your monthly payment to one that you can better afford. You will probably have to request this option as lenders don’t like lowering interest rates because it affects their profits. Another advantage of mortgage loan modification is that it stops late payment reporting to the credit reporting agencies. It gives you a new start much like a refinance. You may qualify if you have recovered from a financial setback. When requesting a loan modification you will be required to provide financial documentation along with a hardship letter stating the cause of your short-term financial difficulties. The hardship letter may include unexpected medical expenses or loss of income and also how those circumstances have now changed, such as a new form income, etc.

Forbearance

Forbearance is an agreement between the borrower and lender that reinstates the delinquent loan through the payment of a lump sum or a schedule of payments over a period of time, usually no more than 12 months. The lender may add the amount in arrears to the mortgage payment for a short period of time until the amount in arrears is brought current. Depending on the circumstances, the lender may allow you to negotiate a temporary suspension of your mortgage payments, setting aside any payments in arrears or; the lender, may allow a reduction in the amount of your mortgage payment. As with loan modification you may need to prove that whatever caused your financial difficulty is short term and that you are now able to make timely payments. The drawback of forbearance is that it does not preserve your credit. Your mortgage payments will continue to be reported as “paid late” until you bring current your total amount in arrears.

Partial Claim

Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current. Your loan must be FHA insured.

Qualifications:

1. Your loan is at least 4 months delinquent but no more than 12 months delinquent;

2. You are able to begin making full mortgage payments.

When your lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay your lender the amount necessary to bring your mortgage current. You must execute a Promissory Note, and a Lien will be placed on your property until the Promissory Note is paid in full. The Promissory Note is interest-free and is due when you pay off the first mortgage or when you sell the property.

Short Sale

The lender allows you to sell the house for less than the outstanding loan amount, takes the proceeds and forgives any remaining debt. Your credit will not reflect a foreclosure.

Short Refinance

The lender forgives some of your debt and refinances the rest into a new loan.

Hard Money Loan

Refinance with a “hard money” loan. The interest rates and fees are extremely high and usually involve a private lender. Normally a short term solution to buy you time to sell your home or find more favorable refinancing terms while avoiding foreclosure.

Mortgage Insurance Claim

Your lender may be able to work with you to obtain a one-time loan from your mortgage insurance fund to bring your mortgage current. You would be required to pay back this loan to the insurance company over time.

Deed-in-Lieu of Foreclosure

As a last resort, you may be able to voluntarily “give back” your property to the lender. You won’t be able to stay in your home, but it is not as damaging to your credit rating as a foreclosure. This option is only available if there are no other liens or judgments on the property.

Lisa Phillips is a marketing consultant specializing in business expansion and development. Because many small business owners lack the personal and business credit necessary to grow and expand, she has developed a free website to aid consumers as well as entrepreneurs in rebuilding and taking control of their credit.

www.rebuildcreditscores.com

The signs are apparent for any homeowner. Home foreclosure is right around the corner if you’ve fallen behind on repayment of loan and the house is serving as collateral. However there are tools available for these situations. Anyone who is facing the threat of home foreclosure needs loss mitigation services or the short sale option to prevent this from happening.

First line of Defense

Surprisingly, most homeowners and property owners are not aware of this term or the method involved with the process. That is not until they need to hire the service. But once an individual is faced with home foreclosure, there is very little choice but to seek the services of a mitigation specialist. As the sub prime crisis continues, there are an increasingly large number of Americans who are facing this situation.

Loss mitigation is a method through which one can stop the foreclosure of their home. Falling back on repaying the loan can happen due to several reasons. It can be due to some unexpected expense, some unforeseen health condition that requires spending lots of money or may be simply because planning out the monthly budget ended up costing huge amounts of money. Whatever may be the reason for falling behind on the payment of the loan money or the mortgage money, you should immediately approach a specialist’s assistance.

Pro Active Choices

The short sale in real estate occurs when the outstanding obligations or loans against a property are greater than what the property can be sold for. Short sales are a way for homeowners to avoid foreclosure on their homes and still be able to pay off their loan by settling with lender.

As always there are a few rules to use. Verify the value of your property. If you are selling the property through an investor, your broker will provide you with an estimate of market value. Determine the amount owed against the property. This will be the total of all loans against the property. Have the investor contact the lender. Some lenders are willing to work with you by reducing the amount owed or making other arrangements. The IRS often gets involved with short sales, because they are seen as a relief of debt and may be treated as income. Check with your accountant.

P.S. If you haven’t signed up for my Free Short Sale Course yet, then you are really missing out, go here: http://www.freeshortsalecourse.com/

Jeff Kaller, visionary, educator and real estate developer has the pioneered the most preeminent pre-foreclosure system in United States. Specializing in a well kept industry niche, Jeff teaches the real estate secrets of purchasing pre-foreclosure properties while executing real estate theory to actual practice. A record of $7 million dollars in properties and a dedicated following of over 9,000 students in less than four years stands testament to his winning strategies.

Determining the best way to stop foreclosure depends on the specifics of your situation.

Various factors like the amount of equity in your home, your monthly payments, your current financial circumstances, what your monthly income is, and how far behind you are on your mortgage play a huge role in coming to an educated decision on the best way to stop foreclosure. Here’s how the foreclosure process works.

The Timeline

30 days… Your troubles actually start as soon as you miss a single payment. Lenders may not contact you until you’ve skipped a second payment, but most will report the first late payment and every subsequent delinquency to the credit bureaus. Even a single late payment can devastate your credit score, the three-digit number that lenders use to help gauge your creditworthiness.

Each subsequent “late” further decreases your score, making it more difficult and more expensive to get a loan or a refinance that might help your situation. In addition, lenders typically tack on late fees of 5% or so for each missed payment.

90 days to one year… Eventually, if the payments aren’t made, the lender will file a “notice of default” with a local courthouse and send you a letter saying that the foreclosure process will start unless you make up the missing payments, late fees, and other associated costs.

How quickly the notice is filed depends on the individual lender and your individual state.

Some lenders halt the foreclosure if you contact them to work out a payment plan or otherwise explain your situation.

Others are more aggressive and start the process as soon as possible to try to protect their investment.

Usually, this notice of default means that the amount you owe has shot up as well, since the lender typically adds substantial fees to cover its legal costs.

The notice of default is generally picked up by the credit bureaus, further depressing your credit score and making refinancing the loan extremely difficult.

90 days more…. Borrowers typically have 90 days from the notice of default to make up the deficit before the lender sends out a “notice of sale,” which sets a sale date for the house (typically within the next 15 to 30 days).

In some states, it can be much longer. But your situation is not getting any better. After missing mortgage payments for 3 or 4 months a mortgage company may “call” or “accelerate” the home loan.

Once this happens they no longer take a single monthly payment, instead insisting all back payments be made at once.

While other options short of paying all back payments may be negotiated, the biggest mistake people make at this time involves allocation of what little cash they do have.

It almost seems natural since the mortgage company says they do not want your money, and the second mortgage company, credit card companies and others call everyday demanding money, the proper thing to do is pay the others.

If there are ten people calling, making nine happy means fewer calls for you and less headaches in the short run.

In the long run this is a critical mistake.

At some point you will need those funds to save your home. Many options exist to stop a foreclosure; but they will all require money. So start saving some money for your lender.

After all, if you stop making your credit card payments, they give you a bad entry on your credit report. If you can’t work out a loan program with your lender, they take your home!!

To find out your state’s particular laws for foreclosure, click on the link below. Then simply click on your state. It provides a wealth of information about the foreclosure process for your state.

http://www.foreclosures.com/www/pages/state_laws.asp

Another good site that explains the difference between the main types of foreclosure by state is listed below.

http://www.seizeforeclosure.com/state_foreclosure_laws.asp

The first step in stopping your foreclosure is learning how to do so.

Many homeowners facing foreclosure simply don’t know what to do. For less than the price of a large pizza, you can learn exactly what your options are and keep your home.

http://www.StopFC.info

Many companies understand the distress than a property owner can face when they are losing their home to foreclosure. A quick search online will reveal the leading companies that are offering help to those who may be facing this terrible situation. This article will look at some possible solutions to your needs.

If you want a second chance at making your home payments then this is one way to get back on track and save your home. If you feel that you can still make a reasonable payment and have some equity in your home then you can seek this type of aide.

Most foreclosure loan companies will offer a free consolation to help you evaluate if this is the right avenue for you to purse. If a company wants a fee to give you an evaluation — then move on. There are too many companies in competition to be charging an evaluation fee.

The following are three possible solutions:

1. A loan company can provide possible Private or Institutional lenders to assist the homeowner so they can remain in their home.

This process will provide the home owner with a completely new loan. Once you can prove that you can make a reasonable payment this may be a great way to get your credit reestablished.

2. Release the homeowner’s from the responsibility in the property.

This is best accomplished by providing investors who will buy out your position in the home and save you from losing credit. Bad credit can cost you thousands of dollars so this option is very attractive if you can no longer make your payments.

3. Foreclosure loan companies can often provide you with short term funding to reinstate your loan and save your home.

This option is very attractive because this will stop the creditors from calling you day and night. This will stop the process fast, but does have some draw back that you may want to consider.

If you cannot make your current payment then option three is probably not the best way to go. No matter what your situation is it is well worth checking into some of the possible foreclosure loan solutions for your situation.

If you need more foreclosure help then quickly head over to http://foreclosure-help-now.com where you will find helpful foreclosure tips, advice and resources including information on foreclosure plans, negotiating and more Foreclosure Loan.

Possibly the most overlooked way to stop foreclosure is for a friend or family member to purchase the property that is being foreclosed and allow the original homeowners to remain living there, and this is a much better option than the tried-and-true “beg, borrow, or steal” alternative. In essence, this can follow the same process as using a private investor to save the home, but it is usually easier for foreclosure victims to trust their friends or family before they trust a real estate investor. Especially with the possibility of running into a foreclosure scam, using someone well-known presents a more secure option. There are a number of considerations before attempting this method of stopping the foreclosure process, all of which homeowners and potential buyers need to be aware of.

The first problem that any buyer will have to confront is if the family member that is purchasing the house out of foreclosure has the same last name as the foreclosure victims themselves. Lenders will often refuse to make a loan in this situation, as it is not a third-party, arms-length transaction. The parties are related and there is a pending foreclosure, so the purchase resembles a family bailout that is attempting to use a new mortgage to take care of a family member, rather than a buyer and seller getting together to complete a real estate transaction. Mortgage companies would like to avoid getting into the middle of homeowners’ intra-family affairs, especially if there is a recent history of financial problems. So foreclosure victims will have to locate a family member who has a different last name or use a friend, if they wish to pursue this method of avoiding foreclosure.

Secondly, if the friend of family member does not have a down payment or excellent credit, it will be very difficult to qualify for the loan to purchase the house out of foreclosure. Currently, the real estate market provides some great deals, because all of the foreclosures have depressed home values in certain areas. This makes many homes much less expensive. In fact, some areas of the country are experiencing decreases of over 50% year-to-year, while values are stagnant or slightly declining across the board. The foreclosure victims may find that they owe much more than their home is currently worth, and the possibility for a short sale may present itself, if the lender is willing to work out a solution.

However, despite the fact that the market is currently favoring buyers due to the lowering of prices, this is also a difficult time for home buyers who need to borrow money to finance their purchase. Many lenders have gone out of business now, while others are following more strict lending guidelines and loaning far less than even six months ago. Qualifying for a mortgage with no money down and less than excellent credit is simply no longer an option. If the foreclosure victims and friend or family member have a savings fund or can liquidate other assets to save the house from foreclosure, though, they will have a significantly better chance of getting a loan with a competitive interest rate.

If this option is open for homeowners facing foreclosure, and they are able to find a compassionate family member or friend who can help them stop foreclosure, it is wise for all parties involved to put together an insurance plan to prevent foreclosure from happening again. Just a few lessons that homeowners can take include saving up an emergency fund to pay the mortgage in the event of a financial hardship, not refinancing the property every few years and treating the house as an ATM, and considering the house as a place to live rather than another bank account. In the event of a future financial crisis, it is also vitally important to contact the mortgage company as soon as the problem begins and inform them of any late payments. Also important is gaining as much knowledge and foreclosure advice as possible from the current situation, so that it will be much easier to respond quickly if problems come up again.

There are a number of important benefits that using a friend or family member as a real estate investor can give the foreclosure victims. These include the possibility of keeping the house, finding a trusted source to help out in a financial hardship, and not having to pay real estate commissions. The problems that homeowners have in this situation, such as finding someone with a different last name to help out, and getting the home buyer qualified for the new mortgage, may be difficult to overcome, but the rewards are being able to stop foreclosure through a secure solution with fewer worries of being taken advantage of. Homeowners in foreclosure need as many options as possible to keep their homes, and this can provide one of the most mutually beneficial solutions, and is in keeping with the local solutions we have recommended in previous articles.

The ForeclosureFish.com website specializes in providing homeowners with important resources and foreclosure help that they can use to save their homes. Offering hundreds of pages of general financial information and foreclosure advice, the site gives foreclosure victims the best chance for putting together a comprehensive plan to avoid losing their homes. Visit the site today to browse through articles, blog entries, and reference materials, or to download a foreclosure e-book that explains the basics of the foreclosure process and how to stop it: http://www.foreclosurefish.com/

Faced with the threat of a foreclosure on their home, with all the weight of the mortgage industry and its army of attorneys against them, the average homeowner might feel like David facing Goliath.

But David defeated Goliath !

David had a sling and some pebbles.

You have an armory of tactics and options which can enable you to stop foreclosure proceedings in their tracks.

There are certain basic rules to follow if you want to stop foreclosure on your home.

*** Do not leave your home. If you do, you may lose your eligibility for assistance.

*** Do not speak to the lender’s Collection department, especially over the phone.

*** Never speak to any of your lender’s representatives without having all your facts assembled, and your strategy determined.

*** Don’t ask the lender what your options are – know your options before the real discussions begin. Know and be prepared for the questions and forms you will be faced with.

*** Don’t volunteer the fact that you are either unemployed or insolvent, or you’re dead in the water. (If you are either unemployed or insolvent, you’d better change things pretty quick, for the lender has to be convinced that you have the means to meet the loan repayments, and he will want to see evidence supporting this fact before he will stop foreclosure proceedings.)

*** Don’t rely on your memory – have everything written down clearly, and all your credit history records at hand.

*** Speak to the lender’s Loss Mitigation or Foreclosure department. Be firm, and insist on speaking to the right people every time.

*** Make a real effort to understand the legal terms relating to mortgages. To stop foreclosure proceedings, you need to speak the same language as your adversaries.

If you cannot fully understand the options, or the terms used, you should certainly speak to a HUD approved counselor – ring (800) 569 4287. And do this as soon as you realise you might be heading for foreclosure.

Know your options ! Know your rights !

Stop Foreclosure – Tip 1
Read all communications from your lender. Time is your enemy, so the earlier the potential problem is recognised by both parties, the better the chances of a resolution.

Stop Foreclosure – Tip 2
If your property is FHA or VA insured, then your lender must give you the opportunity for a workout. If they refuse, then the FDA/VA may fail their claim for foreclosure.

Stop Foreclosure – Tip 3
If you are suffering financial loss due to the death or loss of a spouse, illness, or unexpected increase in your outgoings, contact the lender and request a loan modification, which effectively changes the terms of the loan to lower the payments. This is a very common process, but you will need to provide evidence about the change in your circumstances. If you feel that you qualify for a loan modification, and your lender refuses, contact the HUD for advice.

Stop Foreclosure – Tip 4
If your loss of income is temporary, contact your lender and request a forbearance. This means that you may be granted a period during which your monthly payments are “suspended”, after which you must resume your monthly payments plus a partial payment towards the payments you missed. Most lenders have a forbearance program, but may require you to make an initial down payment.

Stop Foreclosure – Tip 5
If you have a FFA/HUD loan, you may qualify for a partial claim if the present loan is between 4 months and 12 months delinquent. The partial claim has to be repaid only after the original loan has been repaid in full. Any of these measures can enable you to stop foreclosure on your home.

Stop Foreclosure – Tip 6
If all else fails, you could always file for bankruptcy at any time during the lender’s collecting process, and this would put an immediate stop on the lender’s activities. Unfortunately, new bankruptcy reform legislation, to be introduced in October 2005, will effectively invalidate this tactic. Under the new legislation, you must receive credit counseling from an approved agency 180 days – yes, that’s 6 months – before you can file for bankruptcy. By which time the lender could have filed for foreclosure, and you could be out of your home.

Stop Foreclosure – Tip 7
Remember these facts.

The US is facing an ever-increasing tidal wave of homeowners defaulting on their mortgages. The average cost to the mortgage industry for each foreclosure is around $25000!

Foreclosures cost lenders money, big money, so it is in their interests to reach a workout with the borrower, either to rescue the mortgage, if this is possible, or to reduce the loss as a result of foreclosure. Don’t be intimidated by the lender or his attorneys. Appraise yourself of your exact financial position. Seek advice. Know your rights. Know your options. Be honest in your statements. Keep a written record of all communucations.

You can stop foreclosure in its tracks. And save your home.

For your free Mortgage Calculators, and tons of mortgage advice and information, visit Mortgage Loans

What is loss mitigation?

You can be sure that there are a lot of people who do not have the faintest idea what this expression means. For that matter, there are a lot of terms in the finance field that are rarely used by most people in everyday conversation.

If you are now facing a home foreclosure, you are looking for answers- answers that will explain what all this “foreclosure” terminology, means in simple-to-understand words.

Rather than define all these confusing financial terms at once, let’s look at loss mitigation and explain how it may be a “weapon” that you can use to defeat your home foreclosure.

Loss Mitigation…

A course of action that is available to you, the homeowner, and a process that will enable you to stop home foreclosure. That is correct; you the homeowner have the power to request negotiations with the lender. (Imagine that)

Not only can it stop the foreclosure process, but it can help you save your family home and the equity you have built up. The lender agrees to assist the borrower (you) by working out an agreement to help you stay in your home and restructure your loan payments.

Loss mitigation is a set of tools the lender uses to stop foreclosure.

Which could include:

• Special forbearance agreement
• Loan modification / Mortgage Refinance
• Partial claim
• Pre-foreclosure sale
• Deed-in-lieu of Foreclosure

An agreement between the lender and homeowner to repay past due payments within an agreed upon period of time is the goal of loss mitigation. Any of the previously mentioned tools or combination of each can be used by the lender to enforce the agreement.Your current situation…

Your current situation is important in the process, because you are now behind on payments and in danger of defaulting on your home loan. This information needs to be very clearly and succinctly described to the lender.

Communication with your lenders is very important.

Do not hesitate to tell your lender all the facts. When they understand your situation completely, your lender will be more able to help you find the right solution.

You must remember this is business and the lender will approach the negotiations that way. Your job is to put a face/family in front of them and make sure they understand the situation you are facing. If you have recently faced any hardships such as:

• being laid off at work
• going through a divorce
• medical bills
• health issues – resulting in loss of income

The lender MUST know this information.These few are just examples of what the lender will take into consideration when trying to help you stop the foreclosure process. Your hardship and financial circumstances will be taken into consideration.

The negotiations…

The outcome of the negotiations usually results in your existing loan being re-established or modified to some degree. Loss mitigation does not involve you losing your home or the equity you have accrued. In addition loss mitigation is not dependant on your credit rating.

There is help…

As stated earlier loss mitigation is a process available to you. That does not mean that you have to go into your lender alone. In fact if you use a reputable firm, your chances of negotiating with your lender (to benefit you) elevate significantly.

This is not a game; you are facing the possibility of losing your home to foreclosure. Be sure you check out the company before you consider using them. You definitely want to work with a reputable establishment.

The loss mitigation firm will work with you to customize a plan that will fit your individual circumstances.

The benefits of loss mitigation negotiations…

• It is a process that you and your lender enter into. This course of action is meant to cut the losses incurred by both parties.
• If the lender has to foreclose on your property it actually will cost them more than taking time to work out a solution with you NOW!
• You keep your home and equity, and the lender has halted the foreclosure process and has an agreement with you to continue your (altered) mortgage payments

One final point…

You must always remember when you are facing a home foreclosure that time is your enemy. The clock is always running. Even while you are negotiating with your lender…the clock never stops ticking.

Tick-tock, tick-tock, tick-tock…

The best of luck during your Loss Mitigation negotiations.

Jeff Manzanares is the president / owner of Bridges Finance Inc. a finance company in Orange County CA. Jeff is also owner of Home Foreclosure Help a website dedicated to helping a homeowner keep their home when they are facing foreclosure.