With the ongoing tough economic times in US, trobled homeowners are still looking for shelters. What they so want to know is their options so that they can make right decisions. With fraud in market and opporunist people out there, decision making is more complex.

I am myself a first time home buyer and I spent a lot of time looking at homes and understanding the process. I have been following the news since I bought home and have been researching on and on so as I do not struck the same situation.

What I learnt in this process is invaluable first hand experience. I came across some good text recently that I want to share with my fellow hub users. I re-wrote this text after applying a lot of understanding (eaerlier just copied but now have modified completely in my own style and language to give you clearest possible idea)

Read on to understand how you can keep foreclosure away from you:

My first advice is, when you discover you are unable to make mortgage payments, you should contact your lender right away. When you dial their 800 number, ask or press buttons to reach loss mitigation department. You explain you situation to them and ask for options. Make sure you call them before losing to make any payment. It would become difficult to negotiate and ask for assistance if you are close to "missing the payment".

Here are some situations in which you can save yourself from this agony:

Here are two situation that you might be going through

Situation 1,

you are on the verge of missing your payment for the very first time since you bought home, however within a month or so you can resume to normal situation.

There are two options:

forbearance: In such cases lenders may allow you a delayed payment that would give you time to recover and then you can again continue as you were earlier. The technical term used here is "forbearance". Under this option, you can live for short period time without making payments. The understanding here with bank is that you would bring your account to current once you are back to normal mode

repayment: In such situation lender would provide you with a modified repayment plan. In this case, lender adds the certain amount of the first missed payment onto each of the next subsequent two/three payments.

These two options are useful when you have short-term financial problems only like sudden expensive repair, or a medical expense that makes it too difficult to pay your mortgage for one month.

Situation 2,

you are behind on your 2/3 payments for the very first time due to financial hardship, and are looking for the job.

Loan modification: This option is allowed for those who are in tight financial hardship and their situation is not changing even if they get forbearance or repayment facility. A tight eligibility criterion is needed to qualify for loan modification. IF you do qualify for loan modification, you period of repayments may increase or interest rate may be lowered. Also depending upon the situation you balance payments would be rolled in and new payments calculated.

Short Refinance: This is like a short sale to your own self. Depending upon your situation, you lender may be ready to provide you a "short refinance," too. In such situation, the lender agrees to refinance a part of the loan (equal to present day fair market value) into new loan and write off the rest. This option allows lender to keep making money though at lower rate. if you would calculate it would be basically forsaking couple of years of interest for them while still getting the principle they paid. If I calculate what you would pay them in 30 years, it would be like financing your original amount at a lower rate of interest. Not very easy to get, but you could be luck. Try hud.gov to learn more about loan modifications through short refinance

There are other ways but may not sound normal. Get help from your friends, family or real estate broker you know personally to understand more.

To share with you, if none of the above works for you, then unfortunately you may have to undergo the painful process of short-sale to buyers or foreclosure. Both ways are going to be painful, and I pray to god none of the readers of this article or anyone ever has to go through this.

Thanks for spending time on reading. I can help if you have any questions. Please post questions under comments section.

Good luck!