Foreclosure rates are at an all-time high: nearly a million homeowners faced the big F in the third quarter of 2009 alone.
Millions more are on the brink, because of epic job losses and plunging home values.
If you're finding it hard to meet your mortgage, there are preventive steps you can take, but you must act now to get the snowball rolling.
- Get counseling. A recent study by the Urban Institute found that at-risk homeowners who got counseling were 60% more likely to avoid foreclosure—largely because counseling helped them get loan modifications. Call the HOPE hotline: 888-995-HOPE (4673) www.hopenow.com or go to the HUD website's resource page.
- Consider a short sale. In a short sale, your lender agrees to accept less money than what you owe. The trick is getting your lender to agree to this arrangement—and then finding a buyer willing to do a short sale purchase, which can take months.
Foreclosures are a big loss—for you and for your lender—so a short sale might be a good compromise. To find out if you qualify for a short sale, read this and talk to a real estate agent or lawyer in your area who handles short sales. With so many homeowners in crisis, short sales have skyrocketed more than 200% above last year's rate. So while it's more common to take this step, many lenders are backlogged with requests—another reason to act now.