Most people in the United States dream of living the American Dream, which is basically owning their own home. But the reality of this dream is that in some cases it can actually turn into a nightmare because of the fact that your home can get repossessed, In fact homes are actually being repossessed at alarming rates. According to RealtyTrac, more than 223,000 properties entered into foreclosure in September 2007. This amount was almost double the amount of homes that entered into foreclosure in September 2006, which was only one year prior.

So any person who is currently living the American dream actually has every right to be worried that their home can be repossessed because it is a valid fear. But the thing that you need to know is that your home is not going to get repossessed just because you miss one mortgage payment. In fact your home will usually not get repossessed for even missing two mortgage payments, usually in order for your lenders to start the foreclosure process your loan status has to be consider in default, which in most states is 120 days or more past due. But even then the last thing that your lenders will want to do is foreclose on your house because it is going to cost them money, both in fees for the foreclosure process, interest that they are losing and most likely they will take a loss on the house when they sell it at auction.

But just because your lender might not want to foreclose that doesn't mean that they won't foreclose. So if you are behind on your mortgage payments or you know that you are not going to be able to pay your next mortgage payment there are certain actions that you are going to want to take to protect both your credit and your home.

Here are some things that you can do if you can't pay your mortgage.

Number one:
Contact a HUD-certified housing counselor so that you can identify all of your options, this is very important to do especially if you are more than 30 days late on your mortgage payment. The reason that you want to contact HUD-certified housing counselors is that they are trained on the loss mitigation practices of mortgage lenders and they can help you identify what options are going to be best for you and your budget. Not only that but these counselors will also know if you are eligible to apply for grant money and programs that are designed to help you as a homeowner pay your delinquent debts which will help keep you and your family in your home.

Number two:
Contact your mortgage insurance company and enquire about a partial claim. A partial cliam is when the mortgage insurance company on your loan lends you the money to bring your loan current. The best thing about this option is that the partial claim notes do not accrue any interest and they are not due until your first mortgage is paid off or until you have sold your house.

Number three:
You need to contact your lender for your mortgage, if you have two mortgages you will need to contact both lenders. When contacting the lenders you want to ask them about a straight modification. This is an agreement that actually changes the terms of your loan. What this modification does is that it can lower the interest rate and your payments. But the lender can also use the modification to add any of your missed payments to your current balance. This option is great if you are not yet delinquent and know ahead of time that you are going to be having problems paying your mortgage the following month.

Number four:
Contact your lender and ask them about a forbearance request. This is a written agreement that requires you to send in a lump sum amount to your lender to help get you caught up on your missed payments. But after you have sent in the lump sum you will need to continue making your regular payments but in addition to your regular payment you are also going to have to pay a portion of the outstanding balance, your delinquent amount that is left over after the lump sum has been sent in.

Number five:
If you know that you are not going to be able to repay your mortgage or get caught up no matter what options you have you should talk to your lender about a permanent hardship. What happens here is that your lender can grant you this when you can no longer afford to make your payments. What can happen is that they can agree to delay the foreclosure on your house for up to 120 days. By delaying the foreclosure process the mortgage company is giving you time to sell your house.

Number six:
You can also apply for or request a deed in lieu of foreclosure. This is when you voluntarily deed the property back to the investor (or government). And in exchange for giving the property back to the investor you are getting released from all your obligations under the mortgage. With this method you are going to lose your house but most people prefer this to a foreclosure because of the cost and the emotional trauma of a foreclosure, this is less stressful in other words.

Number seven:
You also need to consider doing a short sale of your home. This is also known as a short payoff. This method works really well in cases where property values have actually declined since you took out the mortgage. But what happens with a short sale is that you are allowed to sell your home for less than the full amount that you owe, which means the mortgage company is going to take a loss on what you owe, but you don't have to owe them anymore money and won't face foreclosure.

Number eight:
You also need to contact your mortgage company to talk to them about some kind of repayment plan. Many companies will try to work something out with you if they think that you are serious and want to make this work. So what you need to do is call your mortgage company and be honest with them about what is going on and talk to them about how you want to be responsible and do the right thing and avoid foreclosure. But when doing this remember to be realistic, don't accept a plan that is going to cause you to get behind on your mortgage in the future. You want to avoid getting back into that cycle.

Number nine:
Work out a budget so that you can see what you are spending your money on, basically you will be able to see where your money is actually going. But in doing this you will be able to plan for the future about how you are going to spend your money. You can do this on your own with a spread sheet or free budgeting software that you can find online or you can contact a credit counseling company to get help in creating and following a budget.

Number ten:
Many people do not recommend this method but it can work if you are in a pinch and it can also help get you started on other options because it can show your mortgage company that you are trying to work the problem out and not get any further behind. But what you need to do is to try and pay a portion of your mortgage payment to the lender. Many times the mortgage company will not accept a partial payment; in fact 9 times out of 10 they will simply send the check back to you. But this can help convince your lender that you are serious about not going into foreclosure and that can help them work with you on other options.

Number eleven:
If you have a lot of equity built up into your house you should consider taking out a home equity line of credit to make your mortgage payment until you can get the problem solved. But do not use this option as a permanent solution because you will just fall deeper into debt. Also with this option you want to be sure that once you have solved the problem you will be able to pay off both loans without facing more problems. This can also work if your problem is that you are burdened by unsecured debt, you can think about taking out a loan to pay off your high interest debt which can help free up some of your income to pay your monthly mortgage. This can work because it can lower your monthly payments because the interest rates for a mortgage, even a second mortgage is lower than other types of debt.

But you want to make sure that you research every option that is available to you before you decide because some of the options can end up hurting your credit which means that you won't be able to buy a home at a later date.