What to Do When Faced With Foreclosure

Although the number of homeowners on the brink of losing their homes dipped in October, homeowners still sit in a state of fear that may prevent them from seeking help, or even looking for alternate solutions that will allow them to stay in their homes. Below are some answers to common fears:

Fear: If I alert the mortgage company there is a problem, my home will foreclose faster.

Reality: When you contact your lender, it gives you an opportunity to explain why you haven’t kept up with your payments and what steps you are taking to get back on track. Lenders want you in your home, and may be willing to change the terms of your loan or even devise a repayment plan.

Fear: My mortgage company has already turned me down for a loan modification, so there is no point in contacting a counseling agency.

Reality: There may have been a mistake in provided documentation about your loan, or the lender may have made a processing error. Get a housing counselor who can suggest alternatives to your current financial status so that you become a better candidate for a loan modification with your lender. Fear: I’ll be judged.

Reality: More friends and neighbors than you realize are finding it hard to make ends meet. Seeking help will not only increase your chances of saving your home, but it may be inadvertently inspirational to someone else.

Here is some good news on the home front…

After three years of housing declines, home prices have rallied some in June and have been slowly climbing month-to-month.

This will hopefully rebuild home equity in many homes and reduce the number of borrowers that owe more than their homes are worth, thus having less foreclousre on the market in the upcominy years.

Also,Congress last week extended and even expanded the federal tax credit for homebuyers that has been credited for boosting home sales over the last few months.

Home owners who have owned and resided in their current homes for for at least five consecutive years of the eight years prior to the purchase date are eligible for tax credits of up to $6,500, while first-time homebuyers - or anyone who hasn’t owned a home in the last three years - would still get up to $8,000. For more information about the tax credit available,

For additional information on the Tax Credit,

go to the National Association of REALTORS website: http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit.