Homeowners in danger of losing their homes need a wide range of solutions to have any chance at being able to stop foreclosure and make a reasonably safe recovery afterwards. We've discussed short-term solutions to foreclosure such as our Ways to Stop Foreclosure and long-term solutions such as putting together a revised financial plan, but there are a number of ways that homeowners can begin saving money immediately, in an effort to prevent the bank from putting them into default right away.

Obviously, the very first thing homeowners should do when they are facing a financial hardship is to call the lender and let them know they will be late on their payment for the month. Banks will not want to hear this, but they may be willing to grant their clients more time, initiate a forbearance agreement, or accept a partial payment. These arrangements are somewhat uncommon among lenders, but they are possible if the homeowners ask about them. Far too often, though, homeowners facing the loss of a job or medical problem will neglect to call the mortgage company and, once they begin to be behind on their mortgage payments, the lender will be less willing to work out a plan if the homeowners never informed them of the situation.

When facing a hardship, homeowners should seriously examine their monthly budgets and try to save money in as many areas as possible. It may not be feasible any more to eat out every week, keep 2-3 cars beyond what is necessary, or pay for luxuries like 700 TV channels. Although cutting down expenses to the bare minimum still may not be enough to get back on track and avoid foreclosure, these cost-cutting methods will give the homeowners more money every month that they can save to be able to start a repayment plan with their lender, once they have overcome the financial hardship. But altering spending habits is one of the best ways homeowners can find extra money that they didn't know they had.

Cashing out or selling assets is a third immediate solution. Selling that collection of CDs or vintage Bibles on eBay may not be pleasurable, but being evicted in front of neighbors and friends is quite a bit more painful. Besides personal collections, homeowners may also have life insurance policy cash values, investments, or savings accounts that they can get some cash out of. Although there may be fees associated with cancelling these accounts, they probably do not even come close to the fees that lenders charge once foreclosure proceedings are initiated. Legal fees, late charges, and accrued interest on late payments can increase the total cost of paying off a mortgage by 25-50%, in some instances.

A short-term second job is another option for many homeowners. Even working part-time at a lower-paying job can help, especially if the only other option is not working. If the job is flexible enough, then the search for a full-time job can continue with no real interruptions. And the job may create just enough income to pay the mortgage or begin a savings strategy to get back on track with the mortgage at a future date. Depending on the position, the homeowners may learn more about an industry that they never knew existed or find out more about themselves and the world around them. They also meet a whole new group of people who may become friends who may know other people who can provide them with foreclosure advice, legal counsel, or other mortgage help services.

Homeowners facing a financial hardship should focus on finding both immediate and short-term solutions to stop foreclosure. The immediate steps they may take are informing their lender of the situation, cutting expenses from their budget, selling or redeeming assets, or taking a part-time job to generate steady income. By taking these steps, or a combination of them, they can give themselves a much better chance of qualifying for a short-term solution that will decrease the possibility of losing the home to foreclosure. At that point, the homeowners can begin to put together a longer-term plan to stabilize their income and build an emergency plan to avoid ever having to face foreclosure again.

Possibly the worst feeling in the world is not having enough money. And it's a feeling that far too many homeowners are feeling right now in America. They don't have enough money to pay their mortgages, put together a savings plan, or even plan for certainties like retirement and death. Although under-reported everywhere, it is no secret that more families are simultaneously seeing their incomes stagnate or drop, prices of most consumer goods rising every year, and the value of their largest asset (their home) vanish before their eyes.

And all of this is in contradiction to the numbers coming from the Fed and the media about the actual effects of the housing slump and rising prices. The Fed explains that there is low inflation by the use of an absurd analogy. This assumes that consumers, when they can not afford the increased price of goods they usually purchase, will settle for a similar item of lesser value. Since they spend the same amount of money for substantially similar goods, there is no inflation. So, prices rise (isn't that inflation? ) and, instead of paying the higher price, consumers buy something of lesser value because their incomes are not keeping pace with the rising costs. But, precisely because the consumers can not afford the higher prices, there is no inflation! Brilliant! Did we mention that this is an absurd explanation for prices of goods that are clearly rising?

And now home values are dropping. Some foreclosed homes in Michigan are selling for around the price of a good used car. But are these even deals? And who are they great deals for? Do we want banks and corporations owning large parts of the country, not renting and not selling the homes and continuing to loosen and tighten the money supply in order to keep grabbing more properties every few years? Homeowners in foreclosure now need as many options as they can to stop foreclosure, and the newer lending guidelines are pushing many of them out of the range needed to qualify for a regular refinance or a foreclosure loan. So the massive transfer of wealth from homeowner to bank keeps going, one hundred-thousand dollar asset at a time.

The banks control the money. More and more, the banks are controlling property, as well. By determining who gets the money, banks can determine who is able to own property and who is not. They can decide which businesses qualify for a loan and which will never be opened or go out of business, thereby outlining large areas of the country that will be developed economically and other areas that will receive no investment.

So, don't blame yourself entirely for being faced with foreclosure. It seems that the whole banking system was pretty well designed to get you to the point of taking out a huge loan, not being able to pay it, and having the property transferred from you to the bank. Property used to be transferred from homeowner to homeowner, as one sold and one bought, but now, with banks controlling the enormous supply of money, consumers are left to fight for the few remaining scraps of cash that are still being passed around and not fed into the banking system as interest payments on loans that will most likely never be paid back. And homeowners that need to stop foreclosure before they see their home become part of the royal empire of a global banking lord -- who are you going to trust to help you?

The biggest reason that homeowners fall behind on their mortgages is due to their financial plan. Every family has a plan, whether they have sat down and detailed it, or are just acting "on instinct." And it is the failure of this plan, or its incompleteness or inadequacies, that causes homeowners to become foreclosure victims, frantically seeking out some option that will help them stop foreclosure. The most common reasons homeowners face foreclosure can all be prevented by a more substantial planning process.

When a spouse loses a job and the family almost immediately begins to fall behind on bills, there is a glaring lack of any kind of emergency fund. Every homeowner, with no exception, should have as much saved away as possible in case they suddenly find themselves with no income and no way to make income for several months. It is unfortunate, but businesses shut down, factories are moved out of the country, and companies downsize -- and the worst part is that most workers will be unaware of the problems facing the company until a series of layoffs are announced. But if the family had a plan for this possibility, they would not end up having to decide between feeding their children and paying their mortgage. They wouldn't need to seek foreclosure advice and mortgage help, because they would still be on track.

A death in the family, especially one that leads to a loss in income, is also an occurrence that does not have to end up in foreclosure. An emergency fund can provide some short-term relief, but a sound financial plan should include more income protection. Life insurance, trust funds, and other estate planning tools can be used by the family before a death occurs to make sure that the remaining spouse and children do not have to take second jobs, give up their chances of going to college, or sell valuable assets. We've seen too many families give up their dreams because of a death to realize that not planning for the worst is simply irresponsible. No one should want their family to suffer financially if they are no longer around to provide for them.

These hardships are all too common among homeowners who end up getting behind on their mortgage payments and find themselves looking for a way to stop foreclosure before it is too late. Even for foreclosure victims who find a solution to their problem, many of them end up in similar or worse situations within a year. And after they worked out one plan to save their home, and then need mortgage help again, the lender is much less willing to provide them with foreclosure assistance. This is why homeowners need to have a long-term outlook and start planning for unanticipated hardships, because once a hardship is planned for, it is no longer anticipated -- and it will most likely not even be a hardship at that point!

This is one of the reasons that we have created our ForeclosureFish.com membership option for homeowners. We have relationships with some of the most professional foreclosure loan providers, loss mitigation specialists, private real estate investors, and largest financial education company in the world. This lets us help all of our clients in more areas than any other company that only specializes in foreclosure help. We want to take a long-term approach with foreclosure victims and find a solution to Stop Foreclosure Now -- but, we also want to put all of our clients on the right track so that they do not call us in 6-8 months and request our services again to stop foreclosure again. Also, this long-term commitment with our clients assures them that we want them to work with us long after we have helped them save their home, regardless of the outcome. To learn if you are qualified for our ForeclosureFish.com membership program, please fill out a foreclosure evaluation form on our website today.

US Home Foreclosure Filings Jump 12%
The Subprime Foreclosure Crisis: How Does California Get Out?
Galvin Urges Foreclosure Reforms
Legislators Call for New Foreclosure Measures
Home Foreclosure rate in Ohio Skyrockets

These are some of the top news stories when searching for foreclosure online. It's almost amazing that legislators, state governors, and federal agencies, including Congress, are so late to realize the enormous problems in the real estate market. And the media didn't focus on the unsettling fact that so many lenders were making loans to consumers that they knew had very little chance of ever being paid back.

The rising, record foreclosure rates are news?

Not to anyone who has been in the mortgage or real estate industries in the past few years. The nonexistent lending guidelines created some of the easiest money ever available for mortgage loans. Low interest and easy money gave banks the incentive to give consumers essentially as much money as they could ever have dreamed of. The fact that they got loans for overvalued properties, buying at ever increasing peaks in the housing market, didn't bother them one bit.

And now, homeowners in the best situations find that they owe more on the home than it is worth. Homeowners facing foreclosure are in great danger of having no option to stop foreclosure or save their homes. It should be asked, "If your home is worth half of what you owe on it, what is the incentive to hold on and keep paying the mortgage anyway?" But homeowners want to keep their homes, no matter how long they have owned the property, and no matter what they owe compared to what the house is worth.

So homeowners are searching for options to stop foreclosure, seeking foreclosure advice from any number of different websites, non-profit institutions, regulatory agencies, and self-proclaimed loss mitigators. One financial hardship puts them into a complete panic situation, where they become more vulnerable to losing their homes or becoming the victim of a foreclosure scam with each passing day that they do not make a payment.

And the government regulatory agencies that they trust most to give them useful foreclosure advice and protect them from predatory lending? They are now, in 2007, finally holding hearings and proposing legislation to protect homeowners from every form of predatory or creative lending. This is happening now, in March of 2007 -- not any time in the previous 5 years when the hearings could have prevented much of the foreclosure crisis now hitting the nation's homeowners.

Now we'll have more laws to protect homeowners in the future. Great -- just what we need -- more laws. More disclosure, state databases to store personal information of homeowners, stiffer penalties for lenders and brokers, etc. Penalties and data-gathering requirements will not protect consumers in the future and they do nothing to help current homeowners stop foreclosure from taking away their homes. Tighter lending by banks will only cause fewer homeowners to qualify for mortgages, as they struggle to keep up with the high-interest credit card and huge car loan payments that they took out from the same banks that they are applying for a mortgage with. And banks don't rent houses -- they sell them to whoever can qualify for a mortgage. With fewer people able to afford a mortgage, though, banks and wealthy investors will own greater amounts of property throughout the country.

Better mortgage products, lower interest rates on credit cards/personal loans, and basic consumer education may help to prevent the foreclosure crisis from happening again. Stiffer laws, lending that is too loose or too tight, and further invasions of homeowner privacy will not serve consumers who are doing everything they can to make it look like they are getting ahead.

Our goal is to help you get on the right track to be able to stop foreclosure and accomplish the goals and dreams you have for yourself and your family. Too many homeowners face a financial hardship, get behind on their mortgage payments, and simply give up on their homes and futures, settling for a simpler, unhappier life as a former homeowner with scarred credit. Do not become one of these former homeowners!

One of the most important things to realize when facing foreclosure is that you have options -- you may have more options than you think you have and you even have more than you thought possible. There is always hope when facing a financial hardship, even if life seems to get worse each day as you fall further and further behind. This is simply not the case -- each day that you are in a hardship is one day closer to recovering, and each step you take to repair your situation puts that recovery a little bit closer. Even if it's just researching what can be done to stop foreclosure, you will be improving your knowledge of the situation that you are in. Of course, you have much more of a task ahead than just learning about foreclosure, but researching what may be available to you is the first very important step.

You may also want to contact various companies that provide foreclosure assistance, besides your lender's loss mitigation or foreclosure department. There are numerous sources that provide mortgage help to homeowners: loss mitigation companies, mortgage brokers specializing in foreclosure loans, real estate brokers who can help you sell your home, and others. Many of them will provide you with some free foreclosure advice and guidance and evaluate your situation. Our ForeclosureFish.com website can also provide you with a free foreclosure evaluation, if you are unsure of what options you have available to stop foreclosure. You also receive our free foreclosure e-book, which has received several thousand downloads by homeowners in your exact situation.

Most homeowners, when falling behind in their mortgages, feel helpless and severely uninformed about how the foreclosure process works. Many feel lost and afraid of losing their homes. There is a reason that most homeowners do not know about foreclosure or other aspects of their personal finances. If they understood how money works and how their mortgage works, they may never get a mortgage in the first place, and banks would make less money. This is one of the reasons that banks will immediately threaten foreclosure once you are behind -- they want to scare you into paying them or selling your home, so they get paid their money as soon as possible and might end up with your house, as well. Unless you request it from them, they don't offer to give you any resources or information that can be used to stop foreclosure -- they just call several times a day until you simply move out of the home and give up, simultaneously giving up your long-term financial goals and dreams for your family.

Don't let a bank or foreclosure scam scare you or screw you into giving up on your home or on yourself. Learn what options you have available to fix the immediate problem, and then implement a plan to stop foreclosure now. After you have gotten back on track, your focus should be to work on your budget and financial plan so that you can establish a solid framework that takes any financial hardship into account. Once you do this, you'll never have to worry about foreclosure again.

ForeclosureFish.com members have access to a unique Five-Step program to completely stop foreclosure and repair their credit and begin a long-term financial plan. This program is accompanied by unlimited telephone and email support and gives foreclosure victims the resources to pursue every single known way to save their homes. If they end up facing foreclosure and have to rebuild, it will not be for lack of trying every method possible. And even if the worst happens, the ForeclosureFish.com program is designed to clean up their credit and put them back into a house within a year after foreclosure.

The firs step in this process is to reverse the foreclosure process. Homeowners who have not been paying their mortgage need options to stop foreclosure and they need to be working on as many options at once. This may include looking for a private investor, working with the mortgage company to put together a repayment plan or loan modification, or going through our list of foreclosure loan specialists. But the first goal for homeowners is to stop the foreclosure process from running them over before they are out of options and out of time.

Recovery from the devastating affects of foreclosure is the second step for homeowners. This includes putting together a short-term plan to begin an emergency fund and a long-term plan to make sure that any financial emergency can be survived without a disaster. Regardless of being able to stop foreclosure or not, families who have faced the loss of their homes should have a comprehensive financial plan and budget that outlines their spending habits and provides structure to their monthly budget. That way, they may never fall behind on their debts again.

Cleaning up negative information on their credit reports is another important step to repair their finances completely from the foreclosure situation, and is the third step in the ForeclosureFish.com process. Homeowners have the chance to repair their good names and credit histories by using the resources our members have access to. This includes removing negative information from their credit reports, as well as establishing a positive, on-time payment history again, regardless of past history. Within a few months to a year, previous foreclosure victims can raise their credit scores by 50, 100, or more than 100 points, allowing them to qualify for competitive interest rates without relying on confusing Adjustable Rate Mortgages or interest-only loans.

By the end of a year or so, the fourth step in the ForeclosureFish.com process will be ready. This involves refinancing the current home or repurchasing a new home. After a year of sticking to a budget, planning for any emergencies, and repairing their credit, the foreclosure victims will be in a situation where they can qualify for some of the best rates for home mortgages. They may end up lowering their payments by several hundred dollars a month, or they may qualify to consolidate all of their monthly debt payments into one cheaper, more manageable mortgage obligation. This is when homeowners transition from the short-term financial recovery phase into the long-term financial independance plan.

The fifth and last step in the process to be rewarded with the feeling of having become financially independant. This may mean having established a significant emergency fund and consolidating all debts into one payment, and it may mean having paid off the house completely and being able to retire early due to a wise retirement plan. But at this point, homeowners will never have to worry about any financial hardship again, as they will have the tools and knowledge that will allow them to survive any emergency. Whether it is a loss of job, medical disability or death, or divorce/separation, the family's emergency fund will be able to get them through any problem.

Completing these five steps, from the plan to stop foreclosure to the plan to become independantly wealthy and financially stable, should be the mission of any homeowner currently facing foreclosure due to a financial hardship. All of our ForeclosureFish.com members are currently in some phase of this process, and all enjoy unlimited support from the ForeclosureFish.com team. From learning how to stop foreclosure, or how credit repair works, or how to retire early and never work another day in their lives, homeowners can come out of their current financial difficulties with a long-term solution and start living the life they've always dreamed of!

Depending on how much equity is in a house, and how much it is worth, some homeowners may be able to qualify for a special kind of foreclosure loan, called a hard money loan. These are offered by specific hard money lenders throughout the country, and, although there are special costs involved in using this type of program to stop foreclosure, these lenders can close on a new loan in a matter of days or weeks. Hard money loans can be used very quickly by foreclosure victims who may be running out of time or other options.

Hard money loans are generally offered by institutional groups of private investors who pool their money together to invest in real estate. These investments make up the mortgages that they offer. Usually hard money loans are used when borrowers only have a limited amount of time to close on a loan, when they do not wish to give out their credit history, or when they plan to hold onto a property for a short period of time, or when the plan to refinance soon after closing on the property.

To qualify for a foreclosure bailout loan from a hard money lender, there are usually only two main requirements. The first is that the property must have a substantial amount of equity, usually 70% at least, and more often 60%-65%. This disqualifies many foreclosure victims very quickly, unfortunately, but there are many more who will qualify for a foreclosure loan. A related requirement is that the loan is for a certain amount or more. Hard money lenders will not give loans for less than $75,000 or $100,000 or $200,000 sometimes, because they do not make enough money at lower dollar amounts. The second requirement to qualify for a hard money loan is based on the homeowner having enough income to pay the mortgage every month. While hard money lenders are more concerned with equity than income, they will want to make sure their foreclosure clients are substantially able to make the payments.

Homeowners who do meet the requirements for these loans can expect to pay a premium for the opportunity to get a new loan to stop foreclosure. Hard money lenders often charge 4-5 points up front, which means they will take 4-5% of the loan as their fee at closing. Also, interest rates can be very high, with ranges from 11.99% all the way up to 20.00% for a foreclosure bailout loan. This is why the homeowners need to be in a better financial position and have recovered from the hardship that caused them to face foreclosure. The lender will not want to see them fall behind again, because then they lose their investment and must initiate foreclosure proceedings to take the house.

Hard money loans can be a viable solution for homeowners in foreclosure, if they are able to meet the strict requirements of this type of mortgage. While expensive, the loans are meant to provide foreclosure victims with a much-needed short term solution, give them a second chance to keep their homes, and allow them to rebuild a mortgage payment history. The aim of a hard money loan is for the hard money lenders to make a high rate of return on the investments that they make, as well as give homeowners in foreclosure one more option that can be used to stop foreclosure, if all the circumstances make the loan viable.

As amazing as it sounds, there are still advertisements online, websites, TV informercials, and radio ads all pitching the benefits of getting a mortgage at less than 2% with no money down. Obviously, some people never learn. These are some of the main reasons that homeowners in such record numbers are facing foreclosure, and they indicate that the loose lending of the past years is not over.

Here are a few of the messages that are still being sent out ad nauseum to consumers with poor credit, bad credit, no credit, and no income, little income, or low income: Lower your bills! Get a bigger home for less money! Consolidate your bills into one easy-to-manage monthly payment! Have a credit card on the equity in your house! How can you lose?

It'll be hard to stop the insane amount of advertising being directed at homeowners since these ARM and interest-only loans and debt-consolidation mortgages are in such high demand from consumers who don't know any better. Consumers know they can apply for a loan of any type from any bank and receive dozens of phone calls from potential lenders willing to help them lie on applications, qualify for loans that are in no one's best interest, and end up with a low payment for a couple of years. This happened over the past 4-5 years, though, and the result has been, so far, record foreclosure numbers that are increasing and causing a drag on the rest of the economy. Who knew that lying over and over again on a mortgage application could lead to such negative consequences on the retirement plans of millions of Americans? If you're not trying to stop foreclosure, you're probably trying to stop from postponing your retirement as you watch your 401(k) disappear.

All the homeowners know is that they want as much house as possible, to keep up with and pass the apparent wealth of their friends and coworkers. (The term for this kind of greed is affluenza.) So mortgage brokers sell them what they want right now and conveniently never explain that the loans are just traps waiting to be sprung on the unsuspecting homeowners. It may take a few years for the homeowners to realize that the low rate they got was in exchange for the long-term destruction of their financial plan. Payments are jumping from 8% to 13% and even as high as 20% on some Adjustable Rate Mortgages. This can be a difference of thousands of dollars a month, and homeowners that can not afford the payments find themselves renting an apartment or living with family. Foreclosure victims who have not made a payment in 5 months on a 13% mortgage they thought was 7% will find it almost impossible to stop foreclosure and save their homes.

And now, as even more marketing is being directed at consumers to purchase these mortgages, there is talk of putting the largest private bank in the world in charge of regulating the entire mortgage industry on the federal level. The Fed was not "asleep at the wheel" while all of these loose mortgages were being created; in fact, the Fed was doing exactly what it was designed to do, driving the economy exactly where on their map they wanted it to go: prop up a weak economy (after the dot-com bubble and 9/11) by providing low rates and easy money. "Low Rates and Easy Money" could easily be the slogan for the mortgage industry of the past few years.

The housing bubble was not a naturally-occurring phenomenon in the economy. Just as Roger the Shrubber in Monty Python and the Holy Grail whose job it was to "arrange, design, and sell shrubberies," the Fed's job is to "arrange, design, and sell" bubbles through flooding the market and banks with cheap money. "Imagine a Brinks truck driving down a busy street with the doors wide open, and money flying out everywhere, and you’ll have a pretty good analogy for Fed policies over the last two decades." This statement, by Congressman Ron Paul, indicates even further that homeowners should not trust anyone besides themselves to help them stop foreclosure. There may be individual government employees who will assist them, and certain companies who are interested in saving their homes, but, for the most part, homeowners need to learn how to stop foreclosure on their own.

With all of the complex legal terms and real estate jargon, homeowners in foreclosure are presented with a long list of words that they have never heard of. Foreclosure, notice of default, lis pendens, sheriff sale, and deficiency judgment are a few of these terms that lenders and foreclosure service providers will throw around. Most times, the homeowners will be completely in the dark when it comes to figuring out what relevance these terms have to their own situations. The difference between being in default and in foreclosure is one of the most confusing concepts to foreclosure victims.

Default is a term that is used when the loan is past due by more than 30 days. A homeowner can be in default by 3 months, 6 months, 2 years, etc., without the lender ever putting the loan in foreclosure. It is up to the bank when they actually start the foreclosure process. Default is simply when the homeowners stop paying their mortgage for a period of months. They are approaching the point of being in foreclosure the longer they are in default, but default does not automatically imply foreclosure. It is at this point that they need mortgage help to get back on track with their current loan; if this is not possible, they may qualify at this time for a foreclosure loan, hard money loan, or mortgage modification.

Foreclosure, on the other hand, is the legal process by which a bank attempts to sell a piece of property to satisfy and pay off the defaulted loan. They have to go through the courts or follow the state's foreclosure laws to be able to sell the home at a foreclosure auction or sheriff sale. The bank hires local attorneys to pursue the foreclosure process, in most cases. Until they have decided to pursue the foreclosure process, however, most banks will not hire an attorney. But attorney involvement is one of the main dangers of being in foreclosure, as legal fees can approach tens of thousands of dollars, depending on the circumstances. This is an extremely important reason that homeowners should do everything they can to stop foreclosure as soon as possible. Every day, the lawyers can add more legal fees, making it impossible for the foreclosure victims to save the home or even sell the house for a profit.

Default is when a homeowner is falling behind on the monthly mortgage payments. It is at this point that they should be researching every option they have to get back on top of their payments, or seek mortgage help from their lenders or a reputable third-party loan company or loss mitigation specialist. Foreclosure is when the bank sells the house to pay back the loan that the homeowners are behind on. This is the step where attorneys are hired to sue the homeowners, making it increasingly important for them to find a way to stop foreclosure before they can no longer afford to pay back the missed payments, interest, and growing legal fees.

It's no news that foreclosure are at record highs, continuing to increase, and will keep getting worse until there is a shift from homeowners with ballooning adjustable rate mortgages to more stable fixed-rate loans. But this shift will come at a cost of many homeowners losing their homes to foreclosure, banks owning much more real estate than ever before, and a general disappearance of wealth from people who borrowed money, and those who invested in the loans made to these homeowners. In an effort to keep their homes and stop foreclosure, though, some homeowners have begun to fight back against their banks and realize that there is no one besides themselves who is willing and able to help.

One of the problems with fighting back against the lender to prevent the foreclosure from going through is that homeowners who do not understand the loans they are getting usually end up signing all of the paperwork anyway. They may be lied to, promised the world, given unrealistic expectations, and sold loans based on low "teaser rates," and fail to read any of the loan paperwork they are given before their loans close. However, it is no one else's responsibility to know what is going on with the loan, if the homeowners themselves do not understand what is happening. Brokers and lenders will be glad to sell the benefits of the low rate, low payments, and low closing costs, without mentioning all of the specifics of the loan that will cause the homeowners to fall behind in the event of any financial hardship. But, because the homeowners sign the paperwork, even if they never read it, they will have little legal defense when they realize the loan the bought was not the loan they were sold.

This is one of the main reasons that homeowners absolutely need a financial education that encompasses their entire lives. From mortgages to budget planning, insurance and investments, there is a seemingly endless list of areas that consumers should be aware of. It may seem almost impossible for the general homeowner to put together a real plan to make sure they are doing everything possible to prevent financial emergencies, stop foreclosure right now, or plan for the future of sending kids to college and retiring comfortably. However, this is exactly what homeowners need to do in order to have any reasonable chance to hold onto their homes in the event something unexpected happens.

Consumers surely can not count on their lender, broker, or the government to help them understand what they are actually getting into when they get a mortgage or other financial product. According to one article on Yahoo! News, "As a housing slowdown puts millions of subprime borrowers at risk of default, debate is shifting to whether lenders should be required to ensure their loans are suitable for their customers." There is actual debate whether homeowners should be given loans that they can pay back -- rather than given whatever loan they want and allowing them to lie to qualify for larger and larger amounts of money. Regardless of the outcome of this irrational debate, the fact that there is disagreement on the issue should point out to homeowners that they have only themselves to trust or blame when they end up with a mortgage they can not afford.

It does not take much education or research to gain a general awareness of how the mortgage industry and other financial products really work. Homeowners can and should take time and find a reputable company or broker to work with when applying for a loan, and make sure that there are no hidden traps that may cause them to face foreclosure or fall behind in their mortgage payments sometime in the future. By fitting the mortgage into an overall financial plan, homeowners will have a better chance at being able to weather any storm that may come. And if they one day end up in a situation where they must stop foreclosure to avoid losing their homes, they will hopefully have developed enough self-sufficiency at that point to be able to avoid being taken advantage of again and will be able to recover from the hardship in the most effective way possible.

Our post yesterday looked at the fact that many foreclosure scam companies will post negative or inaccurate information about other foreclosure help companies that they feel are "competing" against them. In fact, though, foreclosure specialists who attempt to dissuade homeowners from looking at other options are most likely just trying to make sure the foreclosure victims do not receive real help to stop foreclosure or save their homes. These companies isolate themselves and attempt to isolate their potential clients, so that they can better take advantage of the homeowners. They may steal homes, steal money, and steal others' material to help them steal homes and cash.

Another way that homeowners can be tricked by shady foreclosure scam companies is the fact that scammers will often steal copyrighted, useful information from good foreclosure help companies and publish it as their own original work. In that way, the foreclosure victims may be persuaded that the foreclosure scam is making relevant foreclosure advice available; however, they are actually receiving original, useful foreclosure information second-hand in a bastardized version.

For example, we recently found our original foreclosure e-book posted on someone else's website as a "Free Foreclosure Booklet." Our names had been messily "removed," and the thief's credentials had been inserted instead. In fact, the original version of the book contains a list of known foreclosure scam companies -- but the scam thiefs who took our book removed this list. Why? Our only conjecture is that they may have been on the original list of scams and had an interest in removing their names from the list of known scammers and republishing the book as their own material.

Obviously, homeowners should be aware of and avoid practices like this. The goal in the foreclosure industry should be to help homeowners stop foreclosure -- not steal from other sites and trick homeowners into believing that copyrighted material is their own. Foreclosure specialists whose only goals are to put negative information out about others and then steal their work can never hope to be successful in providing homeowners with mortgage help; in fact, they will probably never be successful in life in general. This is not the type of help that homeowners in financial hardships need to save their homes.

Foreclosure victims who want real, original foreclosure help resources can feel free to download our foreclosure e-book. Any other bastardized version of the book on any other websites are certainly unauthorized copies being peddled by potential foreclosure scam companies. Even if the companies are not scams, any homeowner should have serious reservations against working with a foreclosure company who steals works from other sites. If they steal our book from us -- they may steal your home from you. And they've already established a pattern of stealing, altering work, and claiming that it's their own.

Foreclosure scam operations can be very difficult for the average homeowner facing a financial hardship to identify and avoid. While there are some clear signs of scams, such as asking for several thousand dollars up front, not stating a refund policy, or asking a homeowner to sign blank or undated documents, one of the best indications of foreclosure scam operators is simply their negativity and unwillingness to treat anyone (clients or other companies) with the level of respect or care that they deserve.

There are many good, hardworking people in the foreclosure industry who are actively trying to provide homeowners with much-needed foreclosure advice and assistance. From loss mitigation companies, to private investors, to real estate agents, to mortgage brokers, and just plain old foreclosure information providers or attorneys, there is a wealth of resources and expertise that foreclosure victims can tap into. Many of these foreclosure specialists have even developed mutually beneficial business relationships with one another in order to trade information, refer clients that they can not help to trusted partners, and share in the great feeling of seeing a homeowner successfully save their homes from foreclosure.

Unfortunately, though, there are also foreclosure scam companies who try to take advantage of homeowners. The ways that they can do this are too numerous to list in one single article. Due to the nature of their business, most of them operate in virual isolation from the rest of the foreclosure industry. Some of them even go so far as to say bad things about every other foreclosure website and foreclosure help company, in an effort to put others down and give themselves a false sense of credibility. They do this by comparing their company in a favorable light to any number of other companies, regardless of what services they provide and the success of each of the other companies' methods.

Most homeowners would probably do well to stay away from companies who make unsubstantiated claims about other foreclosure service providers. There is a real difference between pointing out verified, reported foreclosure scams, that have been covered in detail by news organizations and prosecuted by state regulatory agencies, and merely providing a list of the competition and using negative labels or descriptions in juxtaposition with glowing reviews of the one preferred company.

In another blog entry recently, we told homeowners that, in order to stop foreclosure, they simply do not have the time to waste to find "the best" foreclosure help company. They need to look at foreclosure companies as a sick patient looks for a doctor: find the one that can cure the illness as quickly as possible with the least amount of recovery time. Honestly, there is no "best" foreclosure service provider -- not us, not anyone else, not anyone who calls themselves "the best." However, this is a community of foreclosure specialists who engage in a mutual exchange of information when attempting to help as many of their clients as possible. And, on the other hand, there are isolated foreclosure scam operators who attempt to dissuade foreclosure victims from seeking help from any other potential source for foreclosure advice and assistance.

In fact, our site, ForeclosureFish.com, has spoken with and established friendly professional relationships with some of the best, most dedicated, hardest working foreclosure service providers in the industry. To the very best of our knowledge, they all are active in providing homeowners with the most effective "medical advice and cures" for every foreclosure situation. Some of them provide mortgages, real estate services, loss mitigation services, self-help packages, or legal counsel. We do not consider any of them our "competition;" we consider them our first sources to help us help our clients stop foreclosure in any way possible. And, obviously, there are untold numbers of other great foreclosure companies that we have not yet come into contact with.

Special thanks goes to Justin Lee from SaveMeFromForeclosure.com for providing the inspiration for this current post. We've known Justin for nearly a year now, and he is one of the excellent people in the foreclosure industry who are providing homeowners with real help when they are facing foreclosure or are behind in their mortgages.

The following are three common options that homeowners may have available to stop foreclosure and save their homes. There are a number of different methods that can be used by foreclosure victims to make sure they have the best possible chance to improve their situations and avoid the possibility of being taken advantage of by any foreclosure scam company.

The first option homeowners have is, of course, to do nothing. Now, if they do nothing, as they can probably guess, after about three to six months, depending on the mortgage company, the foreclosure will be filed. And after that, a sheriff sale date will be determined by the courts and the property will be sold at auction. Then, after any applicable redemption period expires, the sheriff will show up at their door and all people and property will be put out to the curb. It's not pleasant, but that's the fact: this is guaranteed to happen by state law, if the homeowners do nothing. Then, in addition to being set out on the street with no place for them or their family to live, the homeowners will end up with a foreclosure on their credit for 7-10 years, making it virtually impossible to get a mortgage at any interest rate, for ten years. It may even be impossible to rent an apartment in many cases. Obviously, this is the least desireable option for homeowners who want to save their homes; in fact, this option does nothing to stop foreclosure.

The second options that foreclosure may have available is to sell the property. However, even if they wanted to sell, they usually can't go about this the traditional way, where they give 6-7% to a Realtor and they put a yard sign out front and wait six months or two years for it to sell. They just don't have that time. So the way to sell the house quickly is to deal with these guys that we affectionately refer to as "vultures." They advertise on billboards and classified ads, "We'll Buy Your Home Today," "We Buy Ugly Homes," and so forth. There's nothing wrong with these guys, of course; all they are is bargain shoppers. But if the homeowners take them up on their offers, and look at the results from the foreclosure victim's perspective, they still end up losing the home, first of all. And they lose it even faster, because they're selling. And second, these companies only pay what the homeowners owe on the property, if they're lucky. Nine times out of ten, they offer the foreclosure victims less than what they owe, which makes the whole deal entirely pointless. The only good thing is, if it's done in time, it could prevent the foreclosure from appearing on the homeowner's credit. But if it's better than doing nothing, it's only slightly better.

A third option is to use a private real estate investors group -- not a bank or mortgage company. Private real estate investors can do things that banks can not do, or will not do. So, one of these investors can actually refinance the home out of foreclosure, without checking credit or verifying employment or income. These types of programs would end up with the homeowner's mortgage being Paid In Full, and they would end up with a brand new note, a brand new mortgage, in effect, based on a 30-year fixed amortization of between 3 and 7 percent. The reason it could be based on a 3-7% rate is that it's not based on their credit -- it's based on the individual investor's credit, and these guys have excellent credit, super high scores, and lots of assets. And the homeowners would have 2 1/2 to 3 months before their first payment is due. Now, of course, most investors charge a fee for what they do, and the fee can be up to 10% of the value of the home, depending on the circumstances. So, for instance, a home that is worth $200,000, would have a fee of $20,000. That fee does not come out of the homeowners' pockets: it comes out of the equity, which they would lose anyway, if they did nothing to stop foreclosure.

Depending on the circumstances of the foreclosure situation and how much actual mortgage help the homeowners are in need of, any of these options may be appropritate. Obviously, doing nothing, or selling the property for a loss are undesireable ways to resolve a foreclosure; this is why many homeowners should keep their options open when considering the best ways to save their homes. Although using a private real estate investor can turn out to be expensive, in some instances, it can also be the best way to avoid losing all of the equity in a home when the bank sells the property at a sheriff sale or foreclosure auction. Homeowners may also have a number of other options available to stop foreclosure, including working out a special forbearance, mortgage modification, or foreclosure loan. To determine if you qualify for any of these options, and wish to avoid bankruptcy, having to sell, or simply doing nothing, please consider filling out our free foreclosure evalution form, and learn what options you have open to stop foreclosure today, before it gets any worse.

One of the problems with foreclosure is that homeowners who are behind in their payments invariably end up the targets of massive mailing and phone call marketing campaigns from foreclosure help companies who are offering their services. With so many scams out there, though, it becomes very difficult for foreclosure victims to know who to trust when they need additional assistance in their efforts to stop foreclosure.

Homeowners may receive upwards of several hundred post cards, letters, or phone calls every week from potential foreclosure service providers and experts. Before working with any of these companies or individuals, it is important to do enough research on the service providers and the methods that they use to help homeowners save their homes from foreclosure. There are a number of ways to complete this due diligence, such as searching online, calling the Better Business Bureau, and contacting the state attorney general to determine if a pattern of complaints exists.

However, it is also important to be aware of the fact that not every foreclosure help company will be trustworthy, regardless of what their current reputation may be. In fact, we are aware of a number of foreclosure scam companies who, as soon as they receive a complaint from a consumer, immediately shut down their current business and simply change the name of the company, change the website, and use different contact information. They then appear to have a pristine record with the Better Business Bureau and regulatory agencies, even though they are actually a fly-by-night foreclosure scam.

Another pitfall that homeowners experience when working with a foreclosure service provider or loss mitigation consultant is having a constant sense of doubt about whether the home will be saved. If the client does not believe that the company can help them, then there is no real relationship between the foreclosure company and the foreclosure victim, and the chances for being able to stop foreclosure drop dramatically. This is one reason why homeowners should do enough research on the loss mitigation company or service provider that they work with, and interview several companies to find the one that they feel most comfortable working with.

As cliched as it may sound, the best advice for homeowners after they have done all of their homework may be simply to trust their gut feeling about the foreclosure company they work with. They may not end up being taken advantage of by working with one of these companies, but if they intuitively feel that the company can not help them, then the company will most likely not be able to achieve the desired results and save the home from foreclosure.

For homeowners who want to utilize a do-it-yourself approach to saving their homes, our ForeclosureFish.com membership may be appropriate, in addition to a number of other products and services offered online. Various reports, educational materials, form letters, and packages are available through numerous sites online, and can all contribute to foreclosure victims being able to get the right amount of mortgage help and foreclosure advice that they need to be able to save their homes and stop foreclosure on their own.

The most important parts of any plan to save a home from foreclosure is to learn as much as possible about how foreclosure works, what options may be used to stop foreclosure, and which mortgage help companies really can provide the homeowners with the assistance they are looking for. Negligence in any of these areas is a quick way for the homeowners to find themselves taken advantage of by a predatory foreclosure scam company. In foreclosure, the best offense is always a good defense.

A more uncommon situation with homeowners may arise if they own a condominium. In addition to the normal mortgage payment and real estate taxes, condo owners also have to pay fees to their Homeowners Association (HOA). But if these fees are not paid, the HOA can and will place a lien on the property and attempt to foreclose on condo, in nearly the exact same way as a bank would. This presents condo owners with one more challenge, as they struggle to keep on top of the fees. But for the owners who are now facing foreclosure of their condos, there are not many options to prevent from losing the home.

There are really only a few viable options to prevent the foreclosure process, but the condo owners would have to come up with some way to pay back the lien on the property caused by the unpaid HOA fees. The HOA is planning to sell the home at sheriff sale so that the lien is paid off. Once they have their amount due, then there is no longer any reason for them to try selling the property. Paying the HOA fees back would immediately stop foreclosure on the condominium.

If the owners can not pay back the entire amount, another option they can try would be putting together a repayment plan with the HOA to slowly pay back the amount of the fees. That might not be a bad idea, depending on the circumstances, if the owner's income can handle paying extra, because they would be paying the regular mortgage payments and fees, but also getting back on top of the missed payments. The condo owners could even try negotiating with Homeowners Association for a lower payoff amount, if possible. They may not take much less than the original amount that they are owed, but they may be willing to decrease the interest charges, late fees, or foreclosure and legal costs.

If a repayment plan doesn't work out, the condominium owners can try to qualify for a foreclosure loan. If they have been paying their regular mortgage payment, and have established a decent payment history, then a bank may be willing to refinance the entire loan and pay off the HOA lien, as well. That would get the Association fees all paid back, and the condo owners would just make the new mortgage payments. Refinancing to stop foreclosure is one of the best options, although it is usually more difficult to qualify for, if the owners are behind in other bill payments.

Besides these few options, though, the condo owners could try selling the home to pay the lien, or filing bankruptcy to prevent the foreclosure, but, either way, the HOA will want their money. It is unfortunate when a Homeowners Association has to initiate foreclosure proceedings on a property because of unpaid fees, but the owners of these condos have a number of viable options available to help them stop foreclosure. Because the lien is not a loan, though, condo owners are somewhat limited in their ability to have any of the terms modified, and the lien decreases the total amount of equity they have in the property. This is why it is important for homeowners to make sure they are able to affor their mortgage, real estate taxes, and Homeowners Association fees, and not face foreclosure for any unpaid bills that can push them into foreclosure.

Just a couple of years ago the average borrower with mediocre to poor credit could purchase a home and get an Adjustable Rate Mortgage (ARM) with a 5-7% interest rate (or lower). When I say “mediocre to poor” I mean someone with a credit (FICO) Score of low to mid 600’s. This is generally someone who has trouble paying their bills on a regular monthly basis. This was great for the real estate market; home sales increased nationwide, values were inflated by the real estate boom and thousands of real estate and mortgage brokers were making more money then they could dream of. In fact, there was so much money being made that these brokers and lenders started to break the rules to generate even more mortgages. Falsified income and inflated appraisals had become a standard with many loans. Hundreds of thousands of homes were sold to buyers with mortgages they could never afford for the long run.

Today, we are seeing these same 5-7% mortgages start to “adjust” fo higher rates. The interest rates are jumping by two or three percentage points immediately and will continue to rise. With a normal market, this increase in interest rate is not a big deal; borrowers simply go back to the broker and refinance into a lower, fixed interest rate. Ideally their credit has improved over the last 2 or 3 years and their home has increased in value. They can eliminate their private mortgage insurance (PMI) and get back the affordable 5% rate they enjoyed in the past; at least this is what they were told by their broker in the beginning.

However, here’s the problem: Interest rates are higher now, their credit is not much better, and because of the market correction, their home is actually worth less than it was 2 or 3 years ago. On top of all this, the government is stepping in and making it harder for the average American to get a home loan. Don’t get me wrong, this is a good thing; by all rights, many of these people should have never been approved in the first place. But what happens now? Foreclosure rates are at record highs and families who had their life savings tied up in their home are being kicked out with absolutely nothing. They’ve lost all their equity to poor market conditions and hefty foreclosure fees, late charges, and legal fees.

Ultimately, poor financial planning and bad decisions are the main cause of foreclosure, but bad advice from an inexperienced broker also contributes to the problem. Families need to take responsibility for each and every financial decision they make and they need to plan for emergencies such as medical problems or losing a job. Relying on the advice of uneducated brokers who only care about their next commission check should not constitute a family's financial plan.

Here are five simple points to remember if you are falling behind on your mortgage or are already facing foreclosure:

1. Evaluate your situation and determine if keeping the home is an option. If you are not capable of making the payments and your financial situation is not likely to improve, then you should immediately search for more affordable housing.
2. Inform your family of the situation and immediately stop unnecessary spending and start selling other assets until you have made it through your financial hardship. Consider downgrading your vehicles to eliminate high car payments.
3. Communicate with your lender, but don’t always assume the lender has your best interests in mind. In most cases the only person you will be able to speak with is a Collection Agent. Their only job is attempting to collect money, and in most cases they do not have the authority to offer a reasonable solution to your problem.
4. Establish a short term budget, prioritizing the mortgage payment and necessary expenses such as food, gas, and electric.
5. Consider taking a second job to temporally supplement your income.

Don’t wait until it’s too late to take action. I receive calls every day from people who need help, but they’ve wasted too much time with mortgage companies or mortgage “mitigation” companies. Unfortunately, most mortgage companies can’t help and loss mitigation companies are mostly scams. In fact, in a recent study, we’ve found that 90% of all “foreclosure help” or “mitigation” companies are operating illegally or as outright scams.

Use your common sense. Don’t send $1,000’s of dollars to someone promising to “fix” your mortgage and don’t wait around until the last minute just to be turned down by another mortgage company. Take action today and follow the steps necessary to save your home and turn your life around.

When you are facing foreclosure, you may need to speak with an attorney about certain situations. Your two main choices for a attorney to provide mortgage help in a foreclosure situation are a bankruptcy attorney, and a real estate attorney who specializes in foreclosures (called a foreclosure attorney for our purposes). Since most homeowners may not be able to afford to hire both types of lawyer, the decision of which to consult with will depend on the exact circumstances of the foreclosure, which are always unique.

If you want to keep the house, and you are out of all other options, then you may want to consult with a bankruptcy attorney and apply for protection under the law, usually through a Chapter 13 bankruptcy. Bankruptcy to stop foreclosure is really considered a last resort and an expensive alternative to setting up a repayment plan, but it could help you hold onto the property for a while longer. Don't consider filing bankruptcy to avoid a foreclosure without knowing that your payments will typically go up dramatically, since you'll have to pay back the amount your behind, plus your regular mortgage payment, every month. Bankruptcy does not give you a "break" from paying your debts -- it gives you one final chance to pay them back perfectly, before they are sent for collection/repossession/foreclosure.

For a foreclosure attorney, you may want to take all of your current mortgage paperwork and correspondence from the lender's attorneys. Your most recent mortgage statements and any letters that the attorneys sent you would be most important, along with current payoff and reinstatement figures for the defaulted loan. The foreclosure attorney can review the documents and determine if anything has been done incorrectly, and potentially have the foreclosure process halted or postponed until the bank and their lawyers have followed the applicable state foreclosure laws. This still doesn't present you with a long-term solution, but it might give you more time to find out what other options you have available to save your home from foreclosure.

Other attorneys may also play a role in helping you stop foreclosure. Contract attorneys, for instance, can review the original mortgage documents and any paperwork that was sent to you if your loan was transferred or sold to another mortgage company. Consumer protection attorneys can help you determine if you were a victim of predatory lending or a shady foreclosure scam. Be cautious of what attorneys you decide to work with, though, as some of them are no less criminal than many other foreclosure service providers. You do not want to find out that the mortgage help you are receiving from your attorney is actually causing you to lose your home much quicker, or that you are being overcharged for every service that you need to stop foreclosure.

In conclusion, hiring an attorney for certain aspects of your foreclosure situation can help you determine more options that may help you correct your situation. While most attorneys will be expensive, and you will have to pay them up front for any actual services they perform, you can usually get a free initial consultation. This will help you determine if filing bankruptcy, suing your bank, or joining a class action lawsuit would help you find an easier way out of foreclosure.

Many homeowners who are behind in payments are surprised when they find out the bank is planning on selling their home out from under them to satisfy the defaulted loan. They feel that the foreclosure process is moving too fast, and that they are being notified of the sheriff sale with too little time to plan any alternatives to stop foreclosure. It may be, though, that the bank has had the foreclosure sale scheduled for weeks, without the homeowners ever being aware of the fact. This post is meant to help foreclosure victims learn where they can go to find out if the bank is planning on selling the property.

To begin with, if the homeowners are worried about a sheriff sale of the property, then they are probably painfully aware of the fact that they are behind in payments -- perhaps by a few months, sometimes by as much as a year or more. If they are reasonably far behind in the payments (typically 3-6 months), the mortgage company has probably hired an attorney's office to pursue the foreclosure against the clients. This is because lenders use local law offices to sue the homeowners in the county court. Some law offices are very large, such as Trott and Trott, which covers nearly all of Michigan, and some are very small offices serving only a few towns. In either case, as soon as the attorneys become involved, they will begin sending letters to the homeowners to collect on the mortgage, and will proceed towards scheduling a sheriff sale of the house.

Calling the lender's attorneys can be the single best source of information about the current status of the foreclosure of the property. The attorneys will know exactly when the sheriff sale of the property is, and can forward a request from the homeowners for a postponement of the auction directly to the correct contact at the bank. Lenders are more likely to be on good terms with their lawyers than they are with their clients, by the time the foreclosure process is in full gear, and the attorneys may have more up to date information about the process than the lender, since the lawyers are the ones actually filing the foreclosure paperwork with the courts on behalf of the lender.

Alternatively, the homeowners can call the county sheriffs department for information regarding the date of the sheriff sale, as they are usually the ones who handle the foreclosure auctions directly, and transfer ownership of the property once the sale is completed (specifics vary by state and county). The county sheriffs office will maintain schedules of when properties have sold or when they are going up for sale, and can give the foreclosure victims the date they are looking for, or inform them that no sale has yet been scheduled.

If the homeowners need more time to save their home from foreclosure, they may want to try getting the auction date postponed, so there is a chance to find a loan to stop foreclosure or sell the home to a private investor or friend/family member. The attorneys office can forward the request directly to the lender, who will make a decision on whether to postpone the sale or not. If the postponement is granted, then the lender tells the lawyers to take the sale off of the schedule with the county and will reschedule it for a different date.

But to find out if a sheriff sale has been scheduled for a property in foreclosure, homeowners should contact either of two offices: the lender's attorneys, and the county sheriffs department. They are the ones who will be handling the sale most directly, so they will know the exact date of the sheriff sale. Knowing when a sheriff sale is scheduled will give the homeowners a clear time-frame for completing any of their plans to stop foreclosure, or for requesting a postponement beyond the original foreclosure auction date.

There is some debate over whether or not the recent drops in stock markets worldwide is a sign of an impending recession (or, even worse, total collapse), or if the banking systems will be able to prop up the world economy again, as they did in the last major downturn, which occurred after the dot-com bubble and September 11, 2001. The current housing market bubble is the next potentially catastrophic tipping point for the carefully balanced world economy.

If massive amounts of homeowners end up defaulting on their mortgages, banks will have far fewer liquid assets, in the form of monthly injections of cash, as homeowners pay their mortgages. They will, instead, be sitting on defaulted loans for months, paying attorneys for costly foreclosure lawsuits, and have to sell the properties that are not saved from foreclosure by the homeowners. This does not create a transfer of wealth from the poor to the wealthy, so much as it transforms the wealth already in the hands of these banks into illiquid real estate holdings, which would need to be sold before banks would have more money to lend out.

The regulators of the monetary system, and the Federal Reserve System, in particular, will most likely institute a policy of even greater tightening of lending policies on mortgages for the short term, to protect banks from even more massive defaults in subprime loans. Tighter lending policies and a drop in the stock market may cause the Fed to lower interest rates, in an effort to boost banks' investment in new business/construction, and support an unloading of homes already in their inventory, or persuade some homeowners to refinance their mortgages, rather than face the possibility of losing the home to foreclosure.

If the interest rate gets even lower, however, the dollar will fall further in vlaue compared to other currencies, such as the European Euro or British Pound. Prices for nearly everything will rise, such as transportation costs, food costs, and energy costs, since the US economy is so dependant on foreign goods and investment. To maintain the look of a healthy economy or soft economic correction, the Fed will almost necessarily be forced to inject the monetary system with vast amounts of cash, in an effort to keep up spending and prop up spending in the economy.

More money and more lending will cause the economy to look as if it is in a state of recovery, because some other bubble will replace the dot-com/housing market bubbles of the last two cycles. As this newest bubble gets to the point of becoming unsustainable, prices will keep rising, and the Fed will have to increase rates and tighten money to protect against inflation. The higher rates will cause money to become more expensive and harder to get in terms of borrowing, and then the market will drop again, continuing the business cycle. Even more homeowners will face foreclosure as prices for everything else rise right along with their mortgage payments.

The problems with any business cycle is that the drops wipe out a vast amount of wealth, as money is transferred or taken out of the economy. The difference between the housing bubble, though, and other cycles, is that the destruction of so much wealth rarely ever has impacted more of the poor and middle class of America as other cycles. Typically, these classes are unable to participate in economic investment other than through spending, because they do not have the disposable income to dedicate towards purchasing stocks or bonds.

Through the loose mortgage lending of the previous years, however, homeowners have been thrust into an economic bubble that is proving to be unsustainable and is already showing signs of a destruction of wealth. Homeowners are facing mortgage payments that are twice as much as they originally paid as ARMs adjust. Foreclosure victims are losing their homes in record numbers. Subprime lenders that supplied these loans are going out of business, as they can no longer sell the loans to investors.

Unfortunately, all the signs are there of a possibility of even worse financial hardships for homeowners. Long term, there has always been a recovery in the stock market from any recession. The optimists really do triumph, over and over again throughout economic history. But homeowners who need mortgage help right now to prevent from losing their homes to foreclosure need to learn what options they have sooner, rather than later. Later may be a time where banks can not take on any more properties, and where tight lending locks homeowners out of getting a loan to stop foreclosure. Foreclosure victims and homeowners in financial hardships need to protect their own investments (their homes) against the possibility of being transferred to a bank and sold off when the markets finally recover.

Sometimes, a homeowner falls into foreclosure with an investment property and a tenant is currently living in the building. Especially when the landlord disappars and abandons the property, the tenant may feel very insecure during the entire foreclosure process. This is because they usually will not have any right to remain in the property if the house is sold at sheriff sale, and they are unable to talk to the lender about the loan, since they are not authorized to speak about the mortgage.

However, many tenants in a situation like this can attempt to purchase the home, even if it is after the sheriff sale. They do not have to become another victim to the foreclosure process, and may end up with a good deal on the house, without having to move out or be evicted from the property. The first question for the tenants will be who is the current owner of the property.

They will have to find out if the state's redemption period laws apply in the case of the house, or if the bank is now the legal owner of the property. This will indicate to the tenants who is the correct party to speak to about purchasing the home. A homeowner who has lost possession and ownership of the property can no longer request rent payments, or sell the property.

If the bank owns the property now, the tenants interested in purchasing can contact the lender as soon as possible to let them know the situation and that they would like to attempt to purchase the property and avoid eviction. As soon as possible, the bank will probably want to see a sales contract or proof that the tenants are working on getting financing for the property (loan application, preapproval letter, etc.).

In the case of the landlord still being the owner and having a redemption period either before or after the sheriff sale, the tenants can try purchasing the property from the landlord, if he has not simply abandoned the house. The tenants should try to purchase the property for as little as possible to get him out, pay off the defaulted loan, and get a good deal. If he's unwilling to sell in the current situation, and is working on some solution to remain in possession of the house, the tenants can wait until the redemption period has expired and then try purchasing from the bank or new owner.

If the landlord is no longer the owner anymore, though, the current lease with him is no longer any good. The bank will evict the tenants if they do not contact them and get some time to purchase the property without having to move out. Banks are generally willing to postone eviction proceedings as long as there is a strong possibility of having a buyer who can purchase the property very quickly. The tenants need to find out who is the listing real estate agent for the property, as well, if one is involved. The agent is usually someone local that they can meet with and submit their offer to purchase the home.

Getting mortgage help is a very tough process for anyone in foreclosure, but the diminished ownership rights that come with being a tenant in a foreclosed property present special challenges. However, it is very possible for rentors to come out of the situation in a better position as new homeowners of a discounted foreclosure property. They will now be the ones in control of the property and will be able to enjoy the benefits of owning the home they have lived in and had been paying rent on.

Can the bank go after a homeowners other assets if they are unable to stop foreclosure and end up with the house getting foreclosed on? Like a car or paycheck?

No. Since the homeowners put up the house as collateral for the mortgage loan, the bank does not have recourse to anything except the property. All of the foreclosure victim's personal belongings will remain in their ownership, whether it is in the property or not. Fixtures that have been installed in the property (such as a new furnace, water heater, etc.), that can not be removed without damage to the property, will have to stay. But the former homeowners can take all of their furniture and clothes and personal belongings.

If the bank wants to come after them after the foreclosure for any other assets besides the house, they will have to sue in court for a deficiency judgment. This is only the case if the house sells at the sheriff sale for less than the amount that the homeowners owed on the loan when the property went to auction. If the house sells for what they owed or more, there is no possibility of a deficiency judgment, since the bank will be paid off completely.

Just remember, the homeowners obtained the mortgage loan by promising them the house as collateral. They have no rights to go after any other personal belongings, unless the home sells for less than what you owed them.

And it's very, very uncommon for banks to pursue deficiency judgments against their clients. They know that the homeowners went into foreclosure because they could not afford to pay them anymore -- not because they suddenly had too much cash and didn't feel like making the payments.

Foreclosure is definitely not good for a foreclosure victim's credit, especially combined with all of the late mortgage payments. If there is some way to pay off the loan, either by selling or doing a short sale, then the credit situation will be slightly better. The goal should be to get a Paid In Full rather than a Foreclosure showing on the credit report, if at all possible. They can ask the bank for more time to sell, get them to postpone the sheriff sale, etc. Anything that gives the homeowners a better chance of preventing foreclosure is far better idea than just losing the home to the lender. This is why it is so important for homeowners to get the mortgage help they need before it gets too late.

Recent news from around the nation and the world points to the possibility of worse short-term economic conditions for consumers in general and homeowners in particular. With the recent downturn in stock markets across the globe, and the downturn in home sales that are casuing more homeowners to consider simply giving up on their homes, it is becoming essential for homeowners to have total financial plans both before and after foreclosure. Putting together a complete financial picture will provide homeowners with mortgage help, budget planning ideas, and various cost-cutting measures that can be implemented.

Obviously, the first step for homeowners who are behind in payments right now is to stop foreclosure as soon as possible. This can be done in a number of ways, including a foreclosure loan, repayment plan, hard money loan, or a deed in lieu of foreclosure, among other methods. The task is to determine what it is that the homeowners qualify for, and what the most affordable solution to foreclosure may be for their specific situation. (For a more comprehensive list of ways to avoid foreclosure, please see our list of "Eleven Ways to Stop Foreclosure.")

A complete financial plan, however, can assist the homeowners in saving their homes from foreclosure, or even find ways that would allow them to save enough money so that they never even miss a mortgage payment. There are always areas in which consumers can cut back costs, lowering their monthly expenses by several hundred dollars a month, in some cases. What is really necessary is just sitting down and tracking when every dollar comes in, and where it goes. Obviously, a plan is not a comprehensive defense against foreclosure, or mortgage fraud, or a complete financial meltdown, but it can make certain situations more bearable, or, at the very least, surviveable.

Once the foreclosure situation has ended, it is arguably even more important to put together a financial plan to get out of debt, own a home outright, or have multiple streams of income with fewer expenses. This can be done by slowly paying off credit cards and car loans, applying extra money towards the principal of a mortgage and other debt, eliminating unnecessary bills, and cutting down on consumption. As well, there are a vast number of home based businesses or internet businesses that can be done in one's spare time, and that revolve around a hobby or interest. Extra income does not have to be generated solely from a 9-5 position with a large company or part time job on nights or weekends.

Homeowners who need assistance with a mortgage payment or are facing foreclosure should have immediate goals and long term goals. Obviously, in the short term, the aim is to stop foreclosure and end up in a beneficial situation, either with the current property or a more affordable home. Long term, though, homeowners should make plans to become financially indepenent and have more than one leg to stand on by eliminating their reliance on just one job. A complete, realistic financial plan will help them go a very long way towards meeting these goals, and may even provide them with the budgetary framework they need to avoid any foreclosure situation now or in the future.