Foreclosures are increasing because borrowers with Adjustable Rate Mortgages (ARMs) are seeing their monthly mortgages payment go through the roof. That leaves people in real financial difficulty and unable to pay their monthly payment. As these mortgages adjust, usually three years after people buy their house, people see their payments go up 10% to as much as 200%. This is truly an issue that is affecting a huge number of upstanding Americans, and it is important to know what to do when you, or someone you love, is in this situation.

The most important thing to do, when you are facing possible foreclosure, is to answer your phone. Don't ignore the calls asking for payment, no matter how tempting it feels to bury your head in the sand. Answer and ask to speak with the "workout department." The bank really does not want to take your house. They are not in the business of owning houses. They just want your payments. Answering your phone and talking with your bank allows you to learn what your options are.

Your lender can renegotiate terms more than they are generally willing to admit. This is called a "workout" and can involve adding the amount you are behind to the end of the mortgage, renegotiating the interest, and other strategies meant to keep you in your home and keep the payments coming into the lender.

Many pre-foreclosure options are ignored for lack of information. There are several options when you are facing foreclosure, and it differs in different states. The most important thing to remember is that you must act now. Usually the timeline from foreclosure to sale is short so you need to act and start some of the below in motion.

Talk with a Housing Counselor. There are lots of non-profit organizations dedicated to helping you keep your home. They can help you better understand your personal situation and even delay foreclosure for quite a while in many states. The Department of Housing and Urban Development (HUD) has a list of counseling agencies on their website. As foreclosures increase, workload does, too. Call these agencies ASAP to get an appointment.

Sell to an Investor. If you are ready to move out of your house and just start over, this may be a good option for you. But it only works if have equity in your property. Most investors will take over the property from you and either refinance, or keep the loan in your name and make payments. When you are served with papers, investors will start contacting you. You can reach them sooner by looking in the newspaper for "we buy houses" ads, or looking in the yellow pages. Beware of "foreclosure rescue" scams (see below).

Short Sale. Banks don't tell you this, but they are willing to take less than you owe on the house as payoff rather than go through the cost of foreclosure. You can sell the house to someone for pennies on the dollar. You must work with a real estate agent on this. Try to find someone who has experience with short sales. Also, set it all up with the bank in advance.

Deed-in-lieu. The foreclosure process is expensive for the bank. In some instances you can just give them your home and walk away making very little impact on your credit. This is called a deed-in-lieu. You usually can not do this if you have an equity line or second mortgage, this is something to check out with your lender.

Sue. Private Lawyers are finding that more and more mortgages are actually illegal. Usually they are illegal because they do not have required disclosures. These lawyers generally work on a contingency-fee basis and can not only stop foreclosure and rescind the loan, but also get you damages. The National Association of Consumer Advocates has a listing of lawyers, listed by state, that are experts in the field.

File for Bankruptcy. This is the LAST RESORT and has serious implications for your life over the next 10 years. This is really really really NOT recommended.

"Foreclosure rescue" scams. Some companies offer temporary refinancing that puts you deeper in debt, but keeps you in the home. These are being investigated by state ad federal prosecutors, and you should STEER CLEAR of these arrangements.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

When Banks Change the Locks on Your Home Before the Foreclosure Sheriff Sale
Especially in the case of homeowners who own multiple properties, they may find that their mortgage company has had the locks changed on a house in foreclosure. This can be very unsettling to owners who are still trying to find a workable solution to foreclosure, because it indicates that the bank ... more...

Transferring Legal Ownership Of A Property Does Not Stop Foreclosure
Unfortunately, many homeowners seem to buy into the myth that simply transferring ownership of their home will somehow relieve them of the responsibility to pay the mortgage and will end the foreclosure. This is a somewhat naive position, though, as putting the house into someone else's name will ... more...

Tips On How To Stop Foreclosure?
Foreclosure is the process that mortgage companies use to try to recover the delinquent loans. The lenders do not want houses or any other real estate instead of money. They want the mortgages paid off and the mortgage payments current. If you have suffered a financial setback, there is a great ... more...

Abandoning vs Surrendering a Foreclosure Home
Some homeowners, when the know they will no longer be able to afford their home, decide that they will simply move out of the house. They may do this for a number of reasons: the bank may be calling them incessantly and they want an escape, they may believe that moving out will allow the bank to ... more...