You Can Prevent Foreclosure- But Do You Want To?

By: James Sopher

Does this scenario sound familiar?

Your banker is breathing down your neck. The calls keep coming and you try to avoid having to answer your phone. It seems destined that you're going to lose your home to foreclosure soon. Well, take a deep breath. All is not lost, at least not yet. It IS possible for you to prevent foreclosure, and once again be able to sleep at night. In just a minute, we'll explore some different ways that you could prevent foreclosure. We'll also discuss ways that could help stop foreclosure after the lender has initiated the process. But first:

Are you certain you want to keep your home?

In many parts of the country, home values have been slashed in half since the peak of the real estate market. If you're one of the many homeowners who are 'upside down' on their mortgage, owing the bank more than your property is worth, you have to ask yourself,

"Is it really in the best interests of my family and me to keep this property?"

If the answer is "No", you may wish to consider doing either a short sale or a deed in lieu of foreclosure.

On the other hand, if you have even a small equity in the home and you would rather not uproot your family, it may very well be worth your time to try to prevent foreclosure.

Analyze Your Situation

The first task you should do is analyze your overall financial situation. Jot down a list of all expenses. Are there items on this list that you could live without? Less dining out at restaurants, watching a rented movie at home versus going to the theater, or maybe brew your own morning cup of java instead of stopping at Starbuck's? A willingness on your part to make some sacrifices will go a long way in convincing your banker to work with you.

Next, write down every source of income for your family. Now list any assets that you might quickly turn into cash. If you are only coming up a few hundred dollars short on your bills each month then it is quite possible you can prevent foreclosure on your home. If, however, you find that you're drowning in debt then trying to stop foreclosure may not be the best answer.

You might be able to prevent foreclosure by earning a few extra dollars each week. There are a number of programs available to work from home and earn a little extra income. You need to exercise caution, though, and don't get hooked by one of the "get-rich-quick" scams. Look for part-time job openings near where you live. This can save you substantial time and commuting expense. If your home is important to you it would be well worth the extra effort to stop foreclosure by earning a little extra.

Working With Mortgage Lenders

If your financial crisis is due to a set of temporary circumstances, you might be able to negotiate directly with your lender to get a short-term repayment plan to bring your payments up to date. You would have to pay a make-up payment each month on top of your regular house payment for several months. Many borrowers don't like this option, as it puts undue strain on their budget.

If your payments have gone up and placed you in the position that you cannot afford the home in the long term, you will either need to get a loan modification that reduces your payments to an affordable level, or qualify for a refinance loan with lower monthly payments. The alternative is to move on to more affordable housing.

If you're still not entirely clear on what the best option is in your specific situation, for you to prevent foreclosure, you probably should speak to a loan modification specialist. Not only will they help you to brainstorm ideas, but typically their initial consultation is free.

There are also good resources available on our website, including "do it yourself" stop foreclosure handbooks that will provide you with the information you need to make these decisions.

Remember, it's important to take action quickly if you wish to prevent foreclosure. This includes communicating with your mortgage lender early on. The lender has a specific window of time during which they might work out a deal with you, before starting a foreclosure. You must act quickly in order to prevent foreclosure.

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James Sopher is a retired real estate professional and free-lance writer. For more detailed advice on how you can prevent foreclosure on your home, visit

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