If you find yourself unable to make your mortgage payment, you should contact your lender immediately and let them know your payment will be late. Most foreclosures take time, so lets take a look at a few things you can do to try to prevent your foreclosure.

These options fall into two categories. Help that allows you to keep your home and help that saves your credit but requires you to sell your home.

What to do to Stop Foreclosure...
and Keep Your Home

• Restructure Your Loan - Do not assume that your mortgage is 100% legally binding. Many mortgages can be renegotiated simply due to the fact they did not follow state and federal guidelines. This is the easiest and most effective way to stop foreclosure.

  Reinstatement - If you are 2-3 payments behind and you will have the ability to make these backed payments, you can try a strategy known as reinstatement. This is when you make one lump some payment to bring you current on your loan payments.



• Forbearance - is the act of postponing your mortgage payments for an agreed amount of time. Reinstatement and Forbearance are usually used in combination.


• Change Your Mortgage Terms - You may regain the ability to start paying your mortgage, but still lack funds to make your past due payments. Some lenders will extend the length of your loan to cover the missed payment.


• FHA - The Federal Housing Authority, or FHA, offers insurance to prevent foreclosure. If the lender is able to get this service, you will have to sign a promissory note to allow the Department of Housing and Urban Develpment (HUD) to put a lien on your property (on the mortgage). The loan has to be repaid on the sale of the property, or when the mortgage is paid off.

Keep in mind: lenders do not want you to go into foreclosure, and even with all these programs available many people still fail to prove that they will be able to make their payments from that point forward. The lender requires two things...

• Your Income Statement


• Your Balance Sheet

These two reports together will show your cash flow pattern, and your money management skills will be obvious to anyone who can read the numbers and understand what they are saying.

Primarily, your lender will check to make sure you have enough positive cash flow every month to make your payments, and will be interested in your income to debt ratio (and you should too...)

Sell Your House...
Save Your Credit