Some Tips to Avoiding Foreclosure...

In a country with a growing foreclosure rate, new default notices being sent every day, and an unemployment rate over 9 percent, the chances of foreclosure affecting you or someone you know is on the rise.

If you find yourself struggling to make your payments, here are some ways to avoid foreclosure.

First, be realistic about your situation. Answer phone calls from your lender and open your mail. This is the time to face your problem head on. Could a foreclosure be on the horizon?

If you are having trouble making monthly payments on other bills, now is the time to pay attention. Your mortgage could be the next bill that becomes too much. In order to curb missed payments, prioritize your spending.

Establish a budget and cut out any unnecessary spending (e.g. movies, cable, eating out, shopping) until you are in a more stable financial state. Apart from healthcare, there is nothing more important than your home. If you have assets to sell off, then do so! The cash may be better spent in helping you save your home.

Next, call your lender to explain your situation and to see what options are available. In these tough economic times, many lenders have programs that may help you stay in your home. Foreclosures do more than run ruin on your credit score, they also affect a lender's bottom line. If working out an agreement with you can help them save that bottom line, the changes of them helping you are high.

Some options you may discuss with your lender include refinancing, reinstatement (where your lender allows you to pay the money you are behind in one lump sum and by a certain date), forbearance (a temporary reduction or cessation of your mortgage payment), a new repayment plan, and loan modification (a permanent change to some of the terms of your existing mortgage).

Beware of scammers during this process. Help and counsel from your lender should be free of charge. If you come across someone requesting a fee in order to facilitate help, chances are it is a scam.

The sooner you contact your lender, the better. Don't wait until you are days away from being foreclosed. The process of working out an arrangement with your lender could take multiple phone calls and weeks of time.