Denial is not a River in Egypt

It seems that everytime I pick up the paper the foreclosure rate for homes goes up and up and up. If you are one of those homeowner's you might be thinking, well what else am I supposed to do?

There are many solutions to a pending foreclosure but the worst solution is making like an ostrich and burying your head in the sand. This is not happening to me, we will figure it out. There are several key steps to getting out from under a pending foreclosure.

The first step is to call your lender. Lenders do not want to foreclose your home, I repeat Lenders do not want to foreclose your home. You will want to let them know that you understand that you are behind on your payments and that you want to work with them for a positive solution. More and more lenders are finding new solutions for helping you in this situation, they may let you make partial payments, interest only payments or make some sort of modification of terms to help ease the burden.

If you are in a situation where you cannot make payments and you know that you cannot keep the home, then you have several options. Make sure that your lenders knows what you are doing because they don't want to foreclose your home and will usually try to work with you. You can try to sell your home. If you owe more than it is worth you can try a short sale. You can offer the house back to the back called a deed in lieu of foreclosure.

Obviously selling the home is usually the best and easiest option but don't wait too long. Call a realtor immediately to find out how much your home is worth. Make sure that realtor not only knows the foreclosure process but that the realtor has also succesfully negotiated short sales before.

Now the short sale, what is it? A short sale is when the lender agrees to accept less money than you owe to sell the home. Say you borrowed $300,000 on your home but today it is only worth $280,000, after realtor fees, taxes and closing costs the amount is now $260,000. When your lender accepts $260,000 that constitutes a short sale. Now not everyone will qualify for a short sale but if you cannot afford the home and it is going into foreclosure this could be your best option.

Lastly is the deed in lieu of foreclosure, that is when the bank accepts the house back from and relieves you of further responsibility. This is good becuase it will not hurt your credit as much as a foreclosure. You must meet certain criteria to qualify but it is still a better option than foreclosure.

If you are feeling the pinch of foreclosure don't wait until it is too late, do three things

1. Call you lender to discuss options

2. Call a realtor (Make sure they have short sale/foreclosure experience) and make them prove it.

3.Call your attorney & tax advisor for the approriate advise because each of these may have tax ramification

And Don't bury your head in the sand

Denial is not a river in Egypt.