How to Prevent Losing Your Home in a Foreclosure

Up to a million American homes may be lost in foreclosures this year as real estate foreclosures soar to record highs, up 30% or more since last year. Although most home owners think they are safe from a foreclosure, recent shifts in both the housing industry and stock market have put even those with good credit at risk.

With major companies like American Mortgage filing for bankruptcy, lenders are running scared and the margin of error for homeowners has shrunk.

The obvious way to keep the foreclosure wolf away from the door is to keep mortgage payments current at all times. Even if other bills must wait, smart homeowners will make the home payment on time each month. Unfortunately, however, that is not always possible. Events such as job cuts, the loss of a job or income, wage reductions, medical bills, and other life experiences can hinder the ability to make mortgage payments on time.

If the unexpected happens and homeowners find that they won't be able to make that next mortgage payment on time, it is not time to ignore the obvious or to sit idle. Action - and prompt action - is needed.

The first thing to do is contact the lender. Open lines of communication are very important. Too often, homeowners fear telling the mortgage company that the payment will be late but actually, it's the smartest course of action. Most lenders want homeowners to keep their home and many will be willing to work out a short term deal to keep families in their home.

Never ignore any communication from the lender. Like an ostrich who hides his head under the sand, some homeowners ignore letters that arrive from the mortgage lender because they assume it's just a late notice or request for money. Ignoring these communications is not wise. A letter may offer steps that can prevent foreclosure or even offer a deal. Later communications may be foreclosure notices and once these are sent, only quick action may prevent foreclosure and sometimes it can be too late. Don't wait until it is too late - open letters and be a responsible adult. The same goes for phone calls from the lender.