Possible ways to avoid foreclosure
To avoid foreclosures you should first ask your lender if it is possible to lower your payments. You can also ask them if it is possible to lower your interest rate or extend the repayment period. Using your home equity you may be able to refinance at a lower rate. As a last option you should think about selling your house. This will allow you to repay the loan and improve your credit.
Things to watch out for
Watch out for people that might try to take advantage of you. If you are already in a bad spot you don't want to be spending money on lawyers and brokers that take advantage of you. You can check out the Better Business Bureau to see if the person has complains against them. And always make sure you read before you sign.
Selling your house
If you end up selling your house, but the sale wasn't enough to cover all the costs then you might need to talk to your lender and let them know. The lender would prefer if you did this rather then going into foreclosure. Either way the lender is going to have to sell the house. This will prevent your credit from being damaged. You will need to submit a letter to your lender letting them know why you can't cover all the costs.
How to write a short sale letter
The letter should be emotional and show real struggling individuals. You might be embarrassed to share your story with other people, but you need to in order to have them help you. Make sure you don't point your finger at anyone in this letter. If you were ill or someone in your family has died then the lenders will sympathize with you more. Don't lie though. Be honest and sincere. Have someone read over your letter so you can get their opinion.
