Seek help right away. The first step is to recognize you have a problem and that you need to deal with it. Rising rates and higher payments are threatening more homeowners' ability to pay their mortgages. Experts suggest that you start by contacting your lender immediately, as early as the first month you have trouble making payment. In many cases, you can work through difficult situations with your lender.
 

Don't ignore communications from your lender. Open all mail from your lender and answer all phone calls, emails and other contacts. If you find yourself involved in legal proceedings, you won't be able to plead ignorance if the loan holder can demonstrate diligent efforts to get in touch with you.
 

Know your rights. Once you realize you are in trouble and you've opened up the lines of communication with your mortgage company, that's a great start, but there's more to be done. Review your loan documents for the specific language regarding what the lender can and cannot do in case of non payment. Research the foreclosure laws and timeframes in your state by contacting your state government housing office. Visit http://www.fha.gov/foreclosure/index.cfm for more information and tips on avoiding foreclosures.
 

Talk to a housing counselor. That person can review your financial situation, determine your available options and negotiate with your lender; protect you from future credit problems before you get too far behind on your mortgage; provide you with information on services and programs in your area that provide financial, legal, medical or other assistance.
For housing counseling agencies approved by HUD, call 800-569-4287. The Union Plus Save My Home Hotline is 866-490-5361.
 

Prioritize your spending. Look at your budget and determine what you can trim down. Health care, food, utilities and shelter are necessary expenses. But you might be able to cancel cable or cell phone service entertainment expenses or other non-essentials. You also might be able to sell a boat, second car or jewelry.

You Can Avoid Foreclosure and Keep Your Home

Contact your lender as soon as you have a problem -

Many people avoid calling lenders about money troubles because we: Feel embarrassed discussing money problems with others
Believe that if lenders know we are in trouble, they will automatically rush to a collection agency or foreclosure (seize property for failure to pay a mortgage debt)

But lenders want to help borrowers keep their homes because:
Foreclosure is expensive for lenders, mortgage insurers and investors. HUD and private mortgage insurance companies and investors like Freddie Mac and Fannie Mae require lenders to work aggressively to help borrowers facing money problems

Lenders have workout options (choices) to help you and:
These options work best when your loan is only one or two payments behind
The farther behind you are on your payments, the fewer options are available

Don't assume that your problems will quickly correct themselves:
Don't lose valuable time being overly optimistic
Contact your mortgage lender to discuss your circumstances as soon as you realize that you're unable to make your payments
Look forward to your lender being willing to explore many possible solutions, without guaranteeing any one particular solution

Finding your lender

Check the following sources to contact your lender:
Your monthly mortgage billing statement
Your payment coupon book

Information to have ready when you call

To help you, lenders usually need:
Your loan account number
A brief explanation of your circumstances
Recent income documents:
Pay stubs
Benefit statements from Social Security, disability, unemployment, retirement, or public assistance
Tax returns or a year-to-date profit and loss statement, if self-employed
A list of household expenses
Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for assistance you must complete the forms fully and truthfully and return them to your lender quickly. Your lender will review the complete package before talking about a solution with you.

CALL YOUR LENDER TODAY! The sooner you call, the sooner help is available.

Don't ignore mail from your lender

If you don't get in touch with your lender, your lender will try to contact you by mail and phone soon after you stop making payments. It is very important that you respond to mail and phone calls offering help. If your lender doesn't hear from you, they will have to start legal action leading to foreclosure. This will greatly increase the cost to bring your loan current.


No one solution for foreclosures: Wells Fargo | Reuters
Challenges facing homeowners today are so manifold that even lenders' best efforts to stave off foreclosures may never work, according to a major lender and a community group on Monday.

The combination of falling home prices, rising payments on adjustable mortgages and higher unemployment in some regions have created problems so diverse that single solutions, such as widening the Federal Housing Administration's (FHA's) reach.

It's a record no County wants to set, one that speaks of economic depression and neighborhood blight. The number of mortgage foreclosures in Jackson County this year has reached 950 -- the highest it's been in about 20 years, maybe longer, officials said.

The number is 10 times greater than it was 10 years ago, and there are still two months left in the year!