As per latest report foreclosure in property has increased by 42% in 2006. Financial hardships caused by either loss of job, accident, injury, or relational problems begin to turn the dream of property ownership into a nightmare.

Economic down turn creates problem to homeowner on the other hand savvy real estate investor's start buying properties at bargain price. This is an investment opportunity for them.

In this article, we will discuss how homeowner can plan to protect their home from foreclosure due to nonpayment of mortgage payments.

What should be the first step?

First and most important step that one can take in preventing the loss of one's home through the foreclosure process is to "communicate' with the lender.

Second step is start negotiation with your lender.

Investing and collecting interest on loans is primarily source of income for banks and other mortgage lenders. Often, lenders also want to avoid cumbersome foreclosure process.
Most of the time bank is also not interested to take the property as they do not have infrastructure to manage foreclose property.

Moreover, if you do not inform your lender regarding your situation, it is assumed that you do not intend to pay mortgage.

Hence, the best thing is to negotiate with the lender for a payment adjustment in order to cover the missed payment or payments. It is mandatory that you act quickly in order to prevent the sale of your home because once the foreclosure process begins you only have 120 to 140 days before your house is sold.

What preparation is required to do before you meet with your lender?

You must have all documents supporting your income and expenses, as well as all loan account information. Discuss with the customer service department of lender, be upfront about your condition and be prepared to discuss your financial situation in detail.

Your lender requires to know your financial situation in order to determine whether they are able to offer a solution.

What are the possible options your lender can offer you?

Lender may agree to extend the term of the loan or lower the interest rate of the loan. This is called Loan modification.

A repayment plan may be suited for you if you have recently recovered from a short- term financial problem and are now able to resume making your regular monthly payments but need time to catch up on the unpaid payments.

Reinstatement may be appropriate if you know and can prove to your lender that you will soon be receiving a quantity of money that will allow you to bring your loan account current.

Sometimes lender agrees to temporarily reduce or stop your loan payments with an agreement on another plan to bring the loan account current. This option is called forbearance and it stops the foreclosure process and is combined with other options, often reinstatement.

If you are uncomfortable with negotiating with your lender by your-self or if you want to better understand of what options you have, contact a reputable foreclosure assistance counseling agency.

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