You can stop foreclosure yourself using one of four effective ways explained in this article. I found an excellent How-To stop foreclosure guide to teach you step-by-step how to do it yourself without hiring an expensive specialist - so keep reading.

Homeowners, by the millions, all across the country are facing foreclosure. You may be in the early stages of pre-foreclosure and have gotten that nasty Notice of Default in the mail from your mortgage company.

You don't want to lose your house to foreclosure and you don't want to sell your house to some greedy investor. What to do?

There are four primary ways to stop home foreclosure proceedings:

1. Loss mitigation

2. Negotiate a short sale

3. Refinance your loan

4. Bankruptcy

1. Loss Mitigation

You can stop home foreclosure by negotiating with your lender(s), namely their Loss Mitigation department, a new payment plan or modification to your existing loan that benefits you and your lender. A loan modification plan may include a partial payment of amounts in arrears and then an extension of the loan terms. This method will allow you to keep your home.

Even if you are "upside down" or "overleveraged" on your equity in the home, you should be able to work out a negotiation.

You need to know that Loss Mitigation departments are overwhelmed with files with today's high foreclosure rates and they may give you the run-around at first. You must be persistent.

You must educate yourself on how to work with your Loss Mitigation department before you pick up the phone to contact them. You don't want to ruin the negotiations before they even start. You need to know, in advance, the 8 critical questions the loss mitigator will ask you to see if you qualify for this stop foreclosure program. You also need to know the single best way to assemble a complete proposal package and send it at the right time so it gets accepted.

You can hire a Loss Mitigation Specialist or service to do this for you. This will cost you on average, $1,500. Depending on your situation it can be less or a lot more. The other option is to spend a fraction of that cost, about $50, and learn from a "Virtual Expert." I found an excellent How To Stop Foreclosure Guide using the loss mitigation method. It will teach you exactly what to do and how to do it. Using this guide book will be like hiring "Virtual Loss Mitigation Expert" to help you, but for a fraction of the price. I recommend you check out this How To Guide now.

2. Selling the house by negotiating a short sale

If you must sell your home but you owe more than the house is worth, and you don't have any money to pay the difference or costs to sell out-of-pocket, you will need to get your lender(s) to agree to discount the loan balance owed and pay your selling costs including your real estate agent's commission. This is called a Short Sale.

You will have to prepare a package of documents the lender(s) will provide to you to make a "case" to convince the lender that taking a "short sale" loss will cost them less money than letting the house go to foreclosure.

Your real estate agent can help you complete the short sale package. There are a couple of thoughts on this. First of all, I recommend you educate yourself as much as possible about the short sale process.

You can search around the internet for bits and pieces of information or you can get a comprehensive education for about $50 from a "Virtual Short Sale Expert" (try hiring a lawyer for 1 hour for that amount) to make sure your agent knows what they're doing to avoid costly mistakes. Remember, once the NOD (Notice of Default) is filed the clock is ticking away to the foreclosure sale date.

There's an excellent How To Guide on using a Short Sale to stop foreclosure. Use the same link above for the How To Guide on Loss Mitigation to learn more.

3. Refinance your loan

Another way to help you stop foreclosure is to refinance your loan(s) that are in default. This solution may not work for you under certain circumstances, including:

1. You don't have the equity needed to refinance your loan(s)

2. You have mortgage lates on your credit report and other derogatory credit accounts. The terms of the new loan may be worse than what you've got already.

3. If you have a pre-payment penalty with your existing loan, that can be a big chuck of change to lose.

4. Bankruptcy

Filing for bankruptcy immediately stops all of your creditors from seeking to collect debts from you (including your mortgage), at least until your debts are sorted out according to the law. Filing for bankruptcy is not as easy at it used to be with the new bankruptcy laws that went into effect October 17, 2005. The new bankruptcy law requires, among other things, individuals to go thru a minimum three-month credit counseling period before filing for bankruptcy. You may not have enough time to do that if your NOD has already be filed.

Conclusion

Consider which one of these effective ways to stop foreclosure will work best for your situation and act immediately. Undoubtedly, a foreclosure notice creates a lot of stress. The best thing to do, is face the situation and take action now.