America is faced with troubled financial times, possible job loss and even home foreclosure. With all this being said, how do we deal with money issues? Well if you are like most Americans, you are trying to get the best deal for your buck. How do you know when you see a good deal though? This is a tough question that can drive people absolutely mad in a store. Are discount stores really saving you money? If you buy one, should you buy the other at half price? Do you need ten tubes of toothpaste, if it saves you a dollar? These all very important questions you should ask yourself before venturing out in the consumer world.

At the end of the month when you actually look at your finances, take all things into consideration. You have to think about the ratio of what you are spending to what you’re saving. If you are cutting back on your cell phone minutes to save five dollars a month, but then spending $7 more a month on long distance, the savings may not add up. Or driving 20 miles out of the way, to visit a discount store for only a few dollars in savings.

You must also think about your family’s needs; if you have a coupon for one dollar off of crackers, that may seem like a good deal, but ask yourself first if you would have bought those crackers, without the coupon. Coupons can actually have you spending more money on unnecessary items, which you probably would have never bought in the first place.

When you are feeling like most of your money is being spent on your 401K, Health insurance, or mortgage payments, it is easy to get nervous and start thinking about penny pinching. Just make sure you weigh the costs. One common thing that happens to everyone is brain rationalization. For instance if you buy an item at a discount “savings” store, your brain may think it is alright, no matter what that item may be. How many times have you gone into a big-boxed store and rationalized your purchases, because you were shopping at a discount outlet. When the matter of fact is, your probably only saving mere pennies and making unnecessary purchases. If you cart is filled with enough cereal to last you half a lifetime you might want to stop and think about your purchase.

Also think about how much driving you are doing to get to these big box discount stores. With gas prices this high, are you really saving much more money than if you would have just gone to the grocery down the street. I have a good friend who will be at the grocery store and buy most of her food there and then drive all the way across town to pick up a loaf of bread, because it is “cheaper.”

Another financial mistake we all make is to by pass a $10.00 lunch because it’s too expensive, but then go out and buy a new sofa at $2000. It is funny how we can trick ourselves out of a lunch, only to rationalize an expensive home furnishing (because it matches the paint). Some things just do not make sense and if you truly want to save money, you need to be aware of all your spending habits.

If you are struggling and having finance problems, then its time to make a budget for yourself and follow it. Be aware of what you are actually spending and crunch the numbers at the end of the month to see if you really are saving. Remember just because it says “sale” does not mean you have to buy it.

Happy Thanksgiving!

From,
ForeclosureFish.com

A loan modification is when a lender modifies your current mortgage to work with you because of personal economical hardship. If you are facing foreclosure, a modification can make your home more affordable. This solution will be some form of a rate reduction and conversion of an adjustable rate mortgage to a fixed loan, usually 30 years fixed.

Today a lot of people are advertising themselves as loan modification specialists. These impostors have displaced mortgage loan underwriters doing the negotiations. Because of this homeowners should be cautious when choosing a company and only work with a company who has licensed attorneys to do the negotiations.

With the financial downward spiral that has taken hold of the nation, many lenders are busy with homeowners trying to stop foreclosure. With all the people facing foreclosure, they just do not have the man power or ability to save everyone. Some people just get passed over or lost in the system. You do not want to end up losing your home, just because someone does not have time to look at your case.

Homeowners facing foreclosure will not get the same results as someone who has legal representation. When a homeowners fall on desperate times, lender may take advantage them, or their lack of knowledge and negotiating skills may hinder them from finding the help they need. Homeowners can, and usually do, end up settling for much less, rather than finding professional help. A lawyer will make sure that your calls get responded to and letters are answered, which can make the difference between saving your home and losing it. Make sure the company you choose has an in-house attorney who is a leading expert in the field of real estate litigation and negotiations.

A common loan modification scam is to charge a separate fee if you have a second mortgage. Keep in mind that you should never have to pay a separate fee if you have a second mortgage. If they try to charge you one that is a sure sign you are being taken advantage of. It is a very common tactic, so watch out for it and move on to another company.

If you end up using a company that does not use attorneys, one thing to keep in mind is that you should only work with a company that has a 100% money back guarantee. If company is as good as they say they are, they should have no problem standing behind their word. If they do not have 100% money back guarantee start looking for a new company, there are plenty out there that do. Make sure you get the guarantee in writing as well. But remember, if a company is scamming you, they may offer a guarantee, with no intentions of honoring it. A guarantee is only as good as the company who stands behind it. Make sure you do your research to make sure the company is not a scam.

Finally, each loan modification should also come with a Cease and Desist letter to your lender. This prohibits lenders from contacting you personally and to get in touch with your attorney instead. You are paying for them to watch your back and take care of you, so make sure that they are.

There is a lot of negative press going on with false loan modification companies, so it is extremely important that you find a legit company to represent you. They are protecting, something personally dear to you, your home, so use these tip and find the right company to save your home today!

Homeowners are encouraged to begin learning about how the legal process of foreclosure works and what role the courts play in forcing the loss of a home. Although there are good arguments that the government does not have any authority to take away someone's home, the sad truth is that it will if the owners do not defend their home vigorously in court. But the tactic borrowers use to save a house will widely differ depending on what their goals are for both their short and long term financial health.

One reason homeowners may try and defend against a foreclosure is simply to get as much time as possible before they sell the house, refinance with a foreclosure lender, or just save up enough to move out comfortably. The goal is not to win the case, per se, but to drag out the process in the court system through a series of motions that must be ruled upon, hearings that must be held, and a long discovery process that can take months to be resolved. The bank, of course, will be adding more fees and interest to the loan, but this may not matter much to homeowners who already have scarred credit and need the opportunity to repair their finances.

Another path borrowers can take in defending a foreclosure in court is to try and force the bank to negotiate some aspect of the loan or winning a case that indicates the lender has overcharged for a mortgage. Homeowners may try and drag the process out and request the judge to force the bank to consider a loan modification or other solution, or the owners may try and make the case that, while they are behind on the loan, they should have to pay a lesser amount than the bank is demanding for reinstatement. Winning counter claims against the bank may also lessen the damage of the foreclosure by rewarding the owners with some monetary damages.

Possibly the most risky but certainly the most rewarding method to use in court is trying to show that the bank violated major provisions of the Truth in Lending Act (TILA) and that the loan should be rescinded entirely. This means that the homeowners would get to keep and save their home, the foreclosure would be ended completely, the lien on the house would disappear, and the bank would have to pay back every single penny the homeowners have ever paid the lender. Obviously, this is a very serious loss for the bank, and it is up to homeowners to learn more about the types of violations that would result in rescission of the loan.

Even if they know how the court system works and how to file certain documents in the foreclosure case, without really having an end goal, homeowners may have a severely negative experience in the courts. But as long as they have a clear idea of what they want to accomplish, they can usually get some concessions from the court and their mortgage company, either on their own or with the assistance of a qualified attorney. While every borrower may not win their case by defending against the bank's lawsuit, it is certain that every one who does nothing will lose and the lender will be awarded a swift foreclosure process and auction date.

Defending a Foreclosure
Step 1: Figure Out What You Want
Step 2: Play By The Rules
Step 3: Get More Time
Step 4: Research Your Options
Step 5: Who Owns the Loan and TILA
Step 6: Have the Lawsuit Dismissed
Step 7: Answer the Complaint
Step 8: The Discovery Process
Step 9: Summary Judgment
Step 10: Go to Trial
Step 11: Lose, Win, or Appeal

Once homeowners fall behind on their payments by a few months, the bank will inevitably begin the process of filing foreclosure paperwork. In states where the lender must (or usually does) go to court to be able to have the home auctioned, a lawsuit is filed against the owners. This is when the clock starts really ticking against borrowers, who must file an answer to the bank's lawsuit, but there is a step that may be taken even to delay the process at this initial juncture in the legal process.

When homeowners are served with a foreclosure lawsuit, they are typically given 20-30 days to file their answer with the court. In the answer, they are able to respond to the allegations the bank made in its complaint, state any affirmative defenses, and claim any defenses to the lawsuit. This is when borrowers can really start making the bank defend each of its positions or attack the lender's ability to bring the lawsuit in the first place.

But homeowners can take a step even before filing their answer that may buy them some extra time and force the bank to begin defending its legal action against the borrowers. Filing a Motion to Dismiss before the answer will put the entire foreclosure process in the courts on hold for a time until the Motion to Dismiss can be ruled upon by the judge in the case. With the slow speed at which many courts operate in the country, this simply maneuver can buy homeowners an extra month or more even before the bank can get a foreclosure judgment on the property.

This is also a way to eliminate a lawsuit very quickly without spending more time defending the bank's arguments point by point in a formal answer. The federal rules of civil procedure state that it is not necessary to file an answer to a complaint until a Motion to Dismiss has been ruled upon by the court. It is also important to note that this legal tactic may be called by other names in other states; for example, it may be referred to as a Demurrer o a Preliminary Objection, depending on the state laws and rules.

One way to begin arguing against the bank's lawsuit without filing an answer addressing the entire complaint is to file a Motion to Dismiss based on the bank's inability to bring the lawsuit in the first place. Homeowners can state that the bank has not shown it even owns the mortgage for it to have a claim to any of the borrower's property. If the bank does not have a right to collect the mortgage payments and foreclose, it is not the party in interest and may not bring a foreclosure lawsuit against the owners.

Especially if the mortgage or note with assignment proof is not attached to the complaint, the bank may have trouble showing it is legally allowed to foreclose on the house. Simply filing a copy of the original mortgage or deed of trust is also not quite good enough, as these documents are a matter of public record. The bank must produce evidence that it is the current owner and assignee of the original note.

Insufficiency of process is another defense homeowners can use to file a Motion to Dismiss before addressing the actual substance of the bank's complaint. When banks do not correctly follow the laws and rules in serving the borrowers with the paperwork, the lawsuit is not valid and may be thrown out of court until the lender can get it right. This is mostly a matter of being familiar with the state and local rules of procedure and pointing out which ones the bank and its attorneys have violated.

Jurisdiction and standing are also issues homeowners may raise in a Motion to Dismiss because they force the bank to prove that it is able to bring the lawsuit and that this particular court has jurisdiction over both the homeowners and the issue. If really pressed on the issue, it is doubtful that the bank's attorneys could prove jurisdiction with facts and evidence, rather than mere legal opinions backed by nothing but fancy legal language designed to trick non-lawyer borrowers.

No matter what defenses they make in their Motion to Dismiss, though, homeowners need to be aware that this tactic only puts the foreclosure on hold until the motion can be ruled upon. It does not stop foreclosure entirely, and the clock will begin running out again if the motion is denied.

For this reason, homeowners need to prepare for more than just this one hearing, and should be working on other solutions to foreclosure, as well. Filing the motion, just like requesting a delay of the sheriff sale, is one more good way to get more time, but homeowners who do not have a long-term plan to save their home will end up homeless anyway. It is much better to use these ideas in context, rather than as an end in themselves.

This is the fourth in a series of articles responding to various inquiries about foreclosure services and different solutions to save a house.

The FHA Hope for Homeowners loans have received a good deal of press -- but will they really help? And do you really want one?

To qualify you need:

1. To convince the current holder to accept an amount of payout equal to the present fair market value of the home less ten percent. Up until the government's 700 billion dollar bailout of the banking system, almost no holder would agree to accept such a small amount. But things could be different if the government has purchased YOUR loan. As they will be purchasing loans at a significant discount, 10 percent of fair market value may not be a bad deal for them.

2. You will have to qualify under fairly stringent FHA guidelines.

3. You must put down in the neighborhood of 3 percent of the loan value and any amounts given to you by family or friends has to be as a loan that cannot be repaid until the FHA is paid off.

4. Your payments will include a one and one half percent insurance payment that will normally raise your payments over a market payment.

5. You cannot have a second mortgage.

6. You have to agree that any increase in value of your home will be shared with the FHA. This ranges from 90 percent in the first year down to 50 percent in the fifth year and thereafter.

So, as can be seen, few will qualify and less will want these loans. But one may really fit some folk's needs.

Whether to do an FHA loan, a mortgage modification, deed in lieu of foreclosure or short sale takes well trained professionals, without anything to gain or lose by your decision.

No one person or foreclosure assistance company, including this site, can give you absolute assurance of honesty or their success rate. I can say that the Debt Advocacy Center is made up of attorneys who are under an ethical code that would make us liable for mistruths. We do not represent you as attorneys, but we are still bound by the attorneys' Canons of Ethics.

I hope you have learned a lot that can help you from these special posts this week, and, if nothing else, know that we are extremely competent and knowledgeable.

Our passion is to help those facing foreclosure to deal with their situations, either themselves or with the help of professionals. It is our opinion that homeowners in trouble should consider trying to negotiate with their lender themselves before paying any company to obtain a loan modification, deed in lieu or short sale.

The key is (i) not to wait until too late if your own efforts are not successful and (ii) not to accept a servicer's offer just to reinstate the mortgage and spread arrears, when you could not pay the basic mortgage payment in the first place.

Usually what they offer is not what can be negotiated. Remember that they are not going to just reduce your payments to be helpful. They will go only as far as they feel they need to. Good negotiating is an art and you can either learn it from our educational program or have us do it for you.

Remember, once you accept a modification or forbearance plan, the holder will never renegotiate it. So do not make the mistake of taking what they first offer.

How to handle a foreclosure

There are, basically, five parts to obtaining a desired result.

Part 1 is to put together all of your loan documents and prepare certain forms necessary to deal with loan servicers.

Part 2 is to put together the facts of the origination of your loan to show the servicer and holder that you can legally contest the foreclosure and that foreclosure will be very expensive in comparison to a modification, deed in lieu or short sale.

Part 3 is to slow down the actual foreclosure process, to allow time to negotiate.

Part 4 is to put together a plan that will fit the holders' underwriting guidelines.

Part 5 is to break through the servicer's lower level personnel to a decision-maker and then negotiate.

If, at any point in this process, you find that you might not be successful, we are available to assist you with further educational materials and/or negotiation services that have achieved over a 90 percent success rate to date.

Over the past months the federal government has enacted one after another pieces of legislation supposedly designed to help homeowners stay in their homes.

Great sound-bites for the politicians eager to look like heroes -- but here is the real truth!

Don't count on it helping you (or anyone who is in real bad trouble)!

Frankly, I am constantly amazed by the baloney that the politicians are hoping we believe is steak. If I wanted deli food I would go to a deli.

The government legislation will help very few homeowners because;

A. The programs are voluntary for lenders. The government simply will not use its regulatory clout to demand compliance. Nothing new in that!! If the regulators were not asleep at the wheel we would not be in this position today!

Look at the political contributions of the financial services industry to see one good reason why. That, along with some very good reasons concerning the future risk to the mortgage industry if the government could simply force a change in loan terms (that would raise interest rates), is the reason why participation was not mandatory.

And it isn't just the Republicans! The Donkey is just as fat as the elephant this time!

B. The federal government has little or no power to modify the terms of loans -- just foreclosure procedures. The Constitution does not permit the federal government to change the terms of prior contracts. They can put some moratoriums or changes in procedures on foreclosures, but they cannot just change the terms of mortgages. That is good for society over the long haul, but makes it hard to clean up this mess.

C. No matter how well intended, the new practices still have to make economic sense to the holder of the loan-which may be the government itself. If the government buys billions of dollars of bad loans, they still must protect the taxpayers' dollars that are invested in this. They will not do anything that is not a good business deal for all of us taxpayers who are not in foreclosure. That means somewhat more modifications but not many more than lenders would have made anyway.

D. The plans are all "cookie cutter" and do not address individual needs. A sledgehammer approach won't work when a scalpel is the right tool. The FDIC plan for banks it takes over (IndyMac was first and many more to follow) and the Countrywide settlement with 11 states will help a small percentage of homeowners. Each plan simply reduces the mortgage payment to between 34 and 38 percent of gross income. But what about most homeowners who need even lower payments because of other debt and costs of living??. If you like dog food for dinner you might just qualify!. As always, the worse off you are the less help is there.

E. The practices must be administered by servicers that are not incented to modify loans and cannot hire the legions of trained people necessary. Servicers usually spend well under $50 on your loan per year and slightly more when they just throw it over to the foreclosure lawyer. Negotiation costs a lot more and so do people to negotiate them.

Ever try to get through to anyone who will even return your calls? Understand that lady who sounds like she is from Burma? (She is actually from Sri Lanka.)

Now you know why.

But, if these programs are used as a means to an end, you can turn this governmental baloney into steak,( and your foreclosure into a bad memory).

Please call us at 1-866-834-6289 We will give you a free analysis of what can probably be done by you or by us to get the relief you need. The FHA loan, a modification bolstered by governmental programs, or a more aggressive plan-each has its benefits and flaws. Our team of lawyers and professional underwriters will know the best approach to take.

Lenders have done improper things during the origination of loans. These things can give most people defenses to foreclosures that make them much more expensive.

As most people have heard, it is much cheaper for the holder of the mortgage to modify it then to foreclose. It will usually lose 40% to 50% on a foreclosure and far less on a modification. SO WHAT IS WRONG? WHY DO FORECLOSURES KEEP HAPPENING AND MODIFICATIONS DO NOT? The answer is in the process that occurs after you take out your mortgage.

These loans were sold in enormous "mortgage backed securities" to "holders" which employ " trustees" for the administration of the loans These holders are what are called "holders in due course" who are legally immune to many claims that the consumer may have had against the original lender. They use this as a "shield" against defenses and counterclaims that homeowners may have against them.

But many of the things that occurred are bad enough that the defenses go through to that holder. And at the Debt Advocacy Center out attorneys have put together which ones those are and how attorneys can use them.

Besides thinking that they are safe from lawsuits, they also think that trustees will do the right thing and modify loans where it makes sense.

But, trustees do not lose money on a foreclosure as they are paid their fees anyway. The holders lose the money but there are too many of them that own any mortgage backed security that they are not really capable of changing the trustee's behavior.

So, many trustees do not care much about foreclosures unless they are the holders too.

Further, the trustee hires "servicers' to do the day-to-day administration of the loans. As they also have no monetary "skin in the game" they do not care either. Who does suffer? The people and institutions that have bought the securities and the homeowner. None of the real injured holders have any realistic say in what is going on; and homeowners can not get at the trustees or holders to negotiate!!

That is why nobody the consumer calls at the servicer is willing to help, except to offer a reinstatement of the loan and repayment of the "arrearage in payments" over time.

Sometimes servicers are told by the trustee to modify loans, but only if the borrower can afford a deal within strict guidelines that most homeowners simply cannot afford.

There is another problem that stops mortgage modifications. The servicers are paid a fixed amount to administer the loan. If they simply push the foreclosure to an attorney, it costs them far less than actually spending money on personnel to negotiate modifications.

So, why negotiate? It actually costs the servicers more! Finally, servicers have hired legions of low paid personnel to handle these foreclosures. Some are even located in places like Sri Lanka and India, who have no knowledge or authority to modify a loan.

Someone does care, however. Those are the senior executives and General Counsel of the Servicers and Trustees who may be held accountable to holders for not modifying loans. They know that legally, they are under a duty to "mitigate" (lessen) the losses on a foreclosure to the true holders of the loan as well as to the homeowners!! When senior attorneys enter the picture, servicers negotiate and trustees force them to do so.

At the DAC we have used our attorneys to show these massive irregularities to senior executives at most of the largest servicers and holders. In turn, they give us our own team of loan modification experts who do not deal with the public.

Because of this we can, in most instances, obtain very significant loan modifications, short sales and deeds in lieu of foreclosure.

Every day we read about the "foreclosure crisis" and how the real estate market crash was responsible for it. NOT TRUE. The truth is that most mortgages that are in foreclosure today, were made by lenders who knew that the borrowers would be unable to pay unless they refinanced. And they should have known that great markets don't last forever and people would not be able to refinance.

How does an adjustable rate starting at two percent and going to ten percent in two years sound?? Do you think anyone could afford that jump??

The terms were unconscionable; not just ethically, but legally. As was predictable by every lender, when prices started dropping and the credit scores of these consumers did not improve, refinancing was not possible and foreclosures resulted.

And now, we are all left holding the bag.

That is only the beginning. Almost every loan for the last 14 years was made with an improperly done appraisal. Appraisals, under a law called FIRREA are supposed to be totally independent, but Realtors, mortgage brokers and lenders made sure that appraisers were pressured into inflating appraisals. That pressure violates any number of laws and regulations and can be used to the borrower's advantage.

Many loan documents did not properly compute the APR on the loan, which is another improper practice.

Loan terms were unexplained and were never properly explained or disclosed. Actual fraud was not unheard of and consumers were the victims, although lenders claimed it was them.

But, there are ways that the lenders' conduct and its impact on the cost of foreclosures, can be used to negotiate affordable modifications, deeds in lieu of foreclosure, and short sales.

With all of the talk about the US Treasury bailing out the financial industry and now potentially the auto industry, everyone has seemed to forgotten the actual homeowners who are suffering from foreclosure. Simply stealing from Americans to paper over losses at large corporations does not address the disastrous monetary policy the government has been engaged in for years. But can we even expect that the government will really do anything to stop the rising tide of foreclosures?

The answer is that they can never save over twenty percent of all delinquent mortgage loans. The recent announcement that Fannie Mae and Freddie Mac will modify many more loans is little more than another good "sound bite" that looks good but means almost nothing. In fact, there is a much better chance the government will make the situation worse than it is right now, and then attempt to address its own problems with more of the same solutions later on. Does anyone else expect numerous future bailouts?

But for homeowners to qualify for the Fannie Mae and Freddie Mac programs, the loan can be no more than ninety percent of the home's present fair market value. Since values have dropped somewhere between twenty and forty percent from just two years ago, and those values were improperly inflated by at least ten percent or more in some areas, and most of these loans were ninety percent or more of supposed (inflated) value at the time made, the question begs to be asked: how many loans of this nature could possibly be helped? The answer is an amazing low figure of about 5 to 10 percent of the loans owned by Fannie and Freddie may qualify for a mortgage modification under these guidelines.

After the destruction of the subprime lending industry, the freezing up of credit for borrowers who were once desirable candidates for mortgages, and a foreclosure crisis that has dumped tens of thousands of homes onto already flooded markets, property values could do nothing else but decline sharply. Do you really think your loan is ninety percent of your home's present value after the market has been destroyed and home finance has dried up for all but the most credit-worthy buyers?

And even if your loan is eligible, then the Government Sponsored Enterprises will only reduce payments down to 38 percent of gross income. This is almost never enough of a reduction to make a lasting impact on a family's financial situation, especially in the case of a job loss or severe medical emergency. And finally, why would any homeowner even want to continue paying on a house that is declining in value, even if the payments are slightly less? The government's modification program is another ill-conceived plan coming on the heels of previous ill-conceived plans, and its eventual failure will result in more equally destructive bailouts and programs.

Many foreclosure assistance companies in the private sector have negotiated many, many loans with Fannie and Freddie, as well as all of the other large banks and mortgage servicing companies. And many of these properties have been much worse off than having a loan at ninety percent of the present value of the house. As well, they have also modified payments closer to twenty-five percent of gross income, thereby freeing up more of a family's income for more important uses after a financial hardship.

With the foreclosure rate ever increasing, the market has been flooded with programs to save a home. There are so many foreclosure assistance solutions from private companies and government programs available to homeowners it can become overwhelming. Knowing where to start getting help and understanding your options can be the hardest step of all.

If you started missing payments on your house and find yourself falling further behind, it is time to start looking for help. When looking for foreclosure assistance, you want to make sure you choose the right solution for you personal needs. There are two main aspects that you need to keep in mind when looking for professional help to solve a foreclosure.

First, make sure you are not getting involved in some sort of foreclosure assistance scam. There are an astoundingly large number of people that will take advantage of others in their time of need. Research any companies you plan on getting involved with and make sure they are legitimate that that you trust them to do what they promise. If there is any question in your mind, you should either do more research before getting involved with one company or another, or simply move on to someone else.

Second, look for every possible option that will save your home, although it may not always be possible. There are plenty of assistance programs out there, but look to one that has as its first priority allowing you to keep the home after the process is complete. Some “foreclosure assistance” programs are only looking to buy cheap houses or otherwise allow you to dispose of them in an easier manner than sheriff sale and eviction.

Now you know the two main concepts to keep in mind when looking for solutions to save your house. You are ready to read over these seven ideas for options either to stop the foreclosure, keep the home, or dispose of it with the least damage to your credit and personal financial situation.

1. The first thing you should always do is talk to you mortgage lender; this is the number one action you can take. This way, you can find out where you stand and what options are available through your current lender. Be honest with your bank, but keep in mind your priority of saving your home, and see what solutions they can come up with. The sooner you go to them, the more likely they can help you, especially if you have not missed too many payments.

2. Refinancing your loan is always a good idea if you have not waited too long. If your adjustable rate mortgage has increased drastically, replacing it through another bank should be your first consideration. Lowering your interest rate will save you a lot of money and will most likely help you avoid foreclosure for the long term. Refinancing is usually only available when you have missed less than three payments, have some equity in your home, and still have a decent credit history.

3. Ask your lender about entering into a forbearance agreement on your loan. Forbearance can help reduce your mortgage payments or even delay them for a time period without any legal action. This is a great option for someone that has had a job loss or extreme financial problems, as it gives you more time to come up with the money to get back on track. The best way to qualify for this solution is to clearly explain your situation to your lender and ask for a special forbearance.

4. Selling your home may be a good option for you if you are still in the pre-foreclosure stages. This is best used when you have not gotten a actual foreclosure filing yet. Obviously it takes time to sell your home, so the quicker you get it on the market, the better. Selling the property is a sure way to avoid foreclosure, although it does not let you keep the house.

5. Some companies will offer you a special repayment plan. This means your lender will allow you to repay your past due amount by adding part of it to your monthly payment each month until you have paid back all of the arrears. This is a good solution if you just fell behind on your bills due to temporary money loss and can keep up with the new higher payments. However, if you will be unable to afford a higher payment or even your regular monthly payment, this option is not a long term solution to foreclosure.

6. You can also find other companies that will do a short sale on your home. A short sale will let you sell your home for less than the mortgage amount, with your lender's approval. This would be more of a last resort, after you have explored your other options. Also, keep in mind that you may incur income tax obligations on a short sale, unless you are technically insolvent and the home's value is lower than the sales price.

7. Using a deed in lieu of foreclosure is a final option you can explore, where you convey all interest in your property to the lender to satisfy your debt and avoid the legal process of foreclosure. A deed in lieu can still harm your credit, so be careful and find professional help before choosing this option. As well, lenders may be somewhat reluctant to accept this type of offer, so make sure that you also have more solutions available.

The most important point to keep in mind is that you need to make sure you explore all possible foreclosure options before it is too late. Help is available from multiple sources and through various methods, so there is probably a good way for you to fulfill your goals with the property. Whether it is stopping foreclosure for as long as possible, keeping the home for the long term, or disposing of the house more efficiently, you just need to take advantage of the time and resources you have available while they are still available.

October 2008 shows that foreclosures are on the rise, approximately 25% nationally compared to last year at this exact time. Lenders began foreclosure proceeding on more than 279,000 in this past month alone. Along with that, 84,000 properties were reported repossessed this past October.

The big questions being: are things going to turn around, when is the economy going to improve and are there laws being put in place to help homeowners. These are all valid yet difficult questions to answer. Right now a combination of strict lending standards, decrease in home values and the poor economy are hindering any improvements for homeowners.

Last month you may remember hearing on the news, the downward spiral of the financial market, forced the government to pass a $700 billion rescue package. The plan was to buy bad assets from the lenders; experts predicted them to have acquired more than a third of all U.S. properties for sale. Last Wednesday it was announced by Treasury Secretary Henry Paulson that the “plan” would not purchase those troubled assets. He said it would take too much time; instead the Treasury will be buying stakes in banks and encouraging them to resume more normal lending.

Housing and Urban Development Secretary Steve Preston also announced on Wednesday that the government could possible let borrowers qualify for a $300 billion program designed to let troubled homeowners swap there risky loans for more affordable ones. The only down fall in this though, is if lenders decide not to participate because of having to reduce the value of a loan and therefore taking a loss. Hopefully this does not happen and the help will decrease foreclosures.

Putting it into prospective- Number of homes that received a foreclosure filing for the month of October 2008:

Nevada- 1 in every 74
Arizona- 1 in every 149
Florida- 1 in every 157

These three states main metro cities hold many of the top ten spots for highest foreclosures filings the month of October 2008:

1. Las Vegas, NV
2. Fort Myers, FL
3. Miami, FL
4. Stockton, CA
5. Merced, CA
6. Phoenix, AZ
7. Riverside/ San Bernardino, CA
8. Ft Lauderdale, FL
9. Modesto, CA
10. Orlando, FL

Now for some good news! Overall, California was down by 18 percent from the previous months. This could be due to some of the new laws delaying the foreclosure process. For example in California lenders have to contact borrowers 30 days before filing a default notices. Other states are now trying to incorporate this law; North Carolina has decided to give borrowers an extra 45 days. Only time will tell if this, along with if the government “bail out plan” will help people avoid foreclosure or just delay the process.

If you are a homeowner and facing foreclosure what is your opinion; can the governments bailout plan succeed? If you were given extra pre foreclosure time, will it help you avoid foreclosure? As a homeowner, what do you think would help your situation the most?

Every step of the process of owning a home and being foreclosed, from applying for the financing to being served with an eviction notice, is heavily regulated by the federal and state governments. While all of these laws are ostensibly designed to protect consumers and homeowners from lenders, the large amount of paperwork these laws create serve mostly to confuse borrowers and allow fraudulent bankers to prey on them.

The foreclosure process itself is no different, although it is almost entirely determined by state laws. Homeowners find themselves thrown into a complex legal system just when they are most unable to afford adequate legal representation. The bank can easily pay several thousand dollars to a local law firm in order to pursue a foreclosure, while the actual victims may just be struggling to put food on their family's table or pay the electric bill.

But mortgage brokers, loan originators, real estate agents, appraisers, title companies, banks, credit reporting agencies, financial investment firms, and foreclosure attorneys are all responsible for following the rules of the real estate and mortgage process. It is inevitable that someone along this chain will miss a disclosure, fail to provide a document, change terms without the borrowers being made aware, or otherwise violate one of the federal or state laws governing these procedures.

And when the bank finally sues owners for a foreclosure, all of these violations can work against the lenders and in favor of homeowners. The Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) are two federal laws that can be used to defend a lawsuit and point out mistakes in the original mortgage, as they cover aspects of a loan from the interest rate, annual percentage rate (APR), disclosure rules, and prohibitions against kickbacks, among many others.

Even if homeowners believe that their loan was done perfectly in accordance with all of the applicable laws (not very likely), simply raising defenses in court based on these laws can drag out a foreclosure case in court for months or years. And if the court finds the lender has violated the TILA, for instance, the entire loan can be rescinded, meaning the borrowers get back every penny they have ever paid since the mortgage was originated and the bank is unable to pursue eviction. Getting back thousands of dollars in monthly payments all at once would certainly help a family in a financial hardship.

But other defenses, while not carrying the weight of a potential rescission, would also allow homeowners to postpone a sheriff sale or eviction, and may even result in monetary damages or an injunction against the bank. This may give borrowers a long period of time in which they can negotiate for a mortgage modification, sell the house, or simply save up money to repair their finances before finally moving out.

There are simply too many laws for the banks to follow to be able to originate and service a loan in accordance with every law out there. While most lenders are fairly strict about following such regulations, the subprime mortgage boom allowed fly-by-night companies to originate one junk loan after another and Wall Street investment firms could never get enough. Now with the collapse of hundreds of mortgage companies, homeowners can and should begin contesting every aspect of a foreclosure that they believe could have been done incorrectly. After all, the burden of proof is on the bank to show it owns a properly executed loan which is in default, a burden of proof that many banks may no longer be able to meet.

When homeowners attempt to work with a mortgage company or servicer on their own to put together a plan to pay back the arrears on the loan, many find that they are offered a bad to impossible deal by the lender. Too often, though, borrowers take anything they can get, even when they know they will not be able to afford the payments for longer than a month or two. There is a far better way to negotiate, however, which can result in a more reasonable modification or payment plan.

Step 1. Homeowners should realize that the plan offered by their bank can be negotiated. When lenders offer a forbearance agreement, it is not a take it or leave it deal, and it is usually the most profitable plan that the bank can propose for itself. But if it will be impossible for the borrowers to make the payments on time for the length of the agreement, then it is no plan at all. Such proposals should be taken as a starting point for negotiating the most mutually beneficial plan to stop foreclosure, rather than the bank's final word. But once the homeowners and borrowers agree on a workout, the lender will not allow it to be changed, which makes it even more important for homeowners to have a reasonable plan.

Step 2. In order to begin the process of negotiating a defaulted loan, homeowners need to have all of their loan documents handy, as well as financial forms and documents that prove they can make a reasonable mortgage payment every month. Otherwise, it will be an uphill battle persuading the lender that it should offer any mortgage modification or other plan. This step is also important because it gives the borrowers a chance to find any errors or violations of law that the loan origination or servicing company committed that would make the foreclosure illegal if challenged in court.

Step 3. If any violations are discovered, such as loan terms that do not follow guidelines set forth in the Truth In Lending Act or local foreclosure notification rules, the homeowners need to outline these infractions. Then the bank must be made aware of them and made to understand that, if the owners pursue the issue in court, it will potentially drag out the foreclosure process for years. A loan modification, on the other hand, would only take a few days or weeks to negotiate and would save the lender untold sums of money in legal fees and lost revenue on the loan.

Step 4. Homeowners must also delay the foreclosure for as long as possible. This might mean having a sheriff sale delayed, requesting the bank put the process on hold in the courts, or even filing bankruptcy in self-defense as a last resort. This gives the bank and borrowers the time necessary to negotiate without the threat of an impending auction or court hearing, and will make the entire situation much less stressful on the owners, as long as they are actively working on the final solution to foreclosure.

Step 5. Homeowners need to construct their own plan based on the amount of money they can put down right away and how much they can afford on a monthly basis. This proposal must also meet the lender's underwriting guidelines and appear reasonable for the bank to accept. A permanent change in monthly income and a lack of available cash on hand may make this part of the negotiation process much more difficult, but the bank will create its own proposal that is often the exact opposite in terms of affordability to that of the homeowners' proposed workout plan.

Step 6. Finally, once both the borrowers and the mortgage company have a proposed plan, it is up to the owners to begin negotiating with someone higher up in the company than a lowly loss mitigation representative. This might mean contacting the manager of the division or a vice president of the company. Most customer service reps only have the authority to give homeowners a take it or leave it plan, whereas higher ups can make decisions to make the proposal more affordable and meet somewhere in the middle of the bank's and borrowers' plans.

Following the steps listed above, most homeowners who have the time and resources to dedicate to the process can end up with a vastly superior loan modification program than the typical ones banks propose. Forbearance agreements and modifications occasionally receive bad reviews from owners who received expensive ones and were unable to make the payments consistently, but these are often plans involving only the mortgage company's idea of what borrowers should have to pay. Any method to save a home is negotiable, and the more homeowners become involved in the process, the better the deal they will receive.

Many homeowners unfortunately seem to believe that the government's new foreclosure relief programs are designed to help them keep their homes and obtain more manageable monthly payments. The reality is, however, that the requirements borrowers must meet to qualify for assistance from the federal government make the programs a cure worse than the initial problem.

And while these programs have received much positive press, the terms offered on the loans provided by the government under the FHA Hope for Homeowners Act are almost predatory in nature, and it is doubtful most borrowers will take the time to realize just what they are getting into. In fact, it is more difficult for borrowers to qualify for an FHA Hope for Homeowners loan that it is for Wall Street firms to receive billions of dollars in direct investment from the bailout program.

For over a year now, home values have been decreasing in large parts of the nation, with areas hit hard by foreclosures suffering more than others. But the FHA requires that homeowners convince their lenders to accept only ninety percent of the current fair market value of the home in order to qualify. In some housing markets, this may necessitate a 30-40% writedown of the mortgage balance, which most banks will not want to recognize.

With the bailout program proceeding, though, the government may become the owner of some of these defaulted mortgages, which may make it slightly easier to qualify for the FHA plan. The government has stated it will attempt to buy mortgage backed securities at a discount, so if it can convince lenders to sell for less than the fair market value of the securities, it may be more plausible for the government to help homeowners qualify for assistance by meeting this requirement.

Another problem for homeowners with subprime mortgages in foreclosure is that the second mortgage must be completely paid off or otherwise disposed of before the FHA will fund the loan. This can be extremely difficult to resolve, as many 80/20 loans were made during the real estate boom, and it is quite unreasonable to expect that a family in foreclosure would be able to pay off 20% of the value of their home just to qualify for another program to help stop foreclosure for good.

Also, the government and banks have worked together to depress the housing market throughout the country and is now blatantly trying to cash in when prices begin to rise again. Homeowners who participate in the Hope for Homeowners plan must split any proceeds of selling the home with the FHA. The government will be able to take up to 90% of any increase in the value of the property that homeowners otherwise would have enjoyed.

Income and debt ratios are also fairly strict under the FHA plan, and the program has a 1.5% insurance payment that must be paid every month for the life of the loan. This can raise the monthly payment over an affordable limit for many homeowners, who are then locked into their house and unable to sell to save the house later on because the government would receive most of the proceeds anyway.

While some borrowers may receive a benefit from the FHA plan, it would be difficult to imagine how such a program could help large numbers of borrowers save their homes with a more affordable, reasonable mortgage. It is only slightly better than a typical hard money loan, and if homeowners can convince their mortgage companies to write down the value of the mortgage by 30-40%, then they can almost certainly convince a foreclosure lender or hard money lender to fund a loan with poor terms, similar to the FHA program.

Homeowners who fall behind in their mortgage but recover from a hardship and are able to get back on track often attempt to work with their lender to qualify for a plan to make up the missed payments. But often, they are disappointed in how poorly the mortgage company responds to their requests for help, even when the borrowers have cash on hand to pay down the arrears.

But the bank never returns phone calls, no matter how many voice messages are left, yet collections calls may continue unabated. It would almost seem illegal for lenders to act this incompetent, but they do it every day and pass up legitimate chances to allow financially stable borrowers to get back on track and stop foreclosure before the house is auctioned off or an eviction date is set.

But of course, failing to work with homeowners who are behind on their mortgage is not illegal. A family was paying, then it stopped paying. The mortgage contract says that if the borrowers stop paying the loan on time every month, the bank can take the house into foreclosure and attempt to have it sold at a public auction to satisfy the debt. There is nothing illegal about enforcing a contract that both parties entered into voluntarily and with all the terms in writing.

So foreclosure and refusing to work with a homeowner is not illegal, per se. Regardless, though, it is almost always a bad idea on the part of the bank not to try and work with the borrowers, especially if they can get caught up again in a reasonable period of time. Banks lose money on foreclosures, and if a homeowner has actually recovered from a financial hardship, then there is no reason why the lender should not at least make an attempt to resolve the situation.

But with so many foreclosures going on right now, if the loan is with a big bank or servicing company, self-represented borrowers are often pushed onto the back burner while those represented by foreclosure help companies, government agencies, or attorneys can get through to the lenders more easily. In fact, it might be worth asking for some help from a reputable assistance provider in this situation and requesting a mortgage modification or other workout plan through the help of a professional.

Unless a borrower is able to sit on hold for multiple hours throughout the workday in order to make sure the bank gets faxes and for status updates, the mortgage modification may find itself on the bottom of the pile, while others are worked on more that are receiving calls every day from the interested parties. It can take days just for a lender to acknowledge that it has received a fax giving a third party authorization to speak with the lender about the loan, and even longer for it to acknowledge receiving a completed loan workout package and reviewing it.

Unfortunately for homeowners, banks are completely incompetent at helping people solve foreclosure in a timely manner unless they are forced to do by legal threats or given a deal that it would be certifiably insane to turn down. Servicing companies and financial firms that have securitized mortgages into bonds can actually make more money by letting a house go into foreclosure, so they have no incentive to make a loan work and decrease their own profits.

As someone who has lived in and around Chicago nearly my entire life, it was with some trepidation that I watched the crowds pour into Grant Park to celebrate the election of Barack Obama to president of the nation. Nearly one hundred thousand people came to the party, many of them weeping, chanting "Yes we can," and believing that now they would not have to worry about gas prices or paying their bills because the government would solve all of their problems.

Unfortunately, the millions of people who cast their vote and thought they decided who won the election and are looking forward to at least four years of change away from the financial corruption of the current administration will be sorely disappointed. The Obama campaign was more awash in Wall Street money than McCain, with five of the world's largest banks and investment firms appearing in the list of the campaign's top twenty contributors.

Currently, Goldman Sachs is essentially in control of the US Treasury Department, with Secretary Paulson leading the agency and appointing as the Interim Assistant Secretary of the Treasury for Financial Stability another Goldman Sachs alumni, Neel Kashkari. The financial investment company (now a bank) donated over $874,000 to Barack Obama and another $228,000 to John McCain.

Merrill Lynch, Morgan Stanley, Citigroup, JPMorgan Chase, and even bankrupt Lehman Brothers also made large contributions to both candidates. These are the very companies that own the Federal Reserve which sets interest rate and inflation policies for the nation, and which helped to inflate the housing bubble. Now with the housing bubble dragging down the rest o the economy, Americans have elected a new president who is being funded by the same financial power centers that live off of government subsidies and have bankrupted the country.

With all of the losses and loan writedowns being reported by large banks like Citi and JPMChase due to poor investments in subprime mortgages, and the financial industry's constant calls for more taxpayer-funded bailouts, the question begs to be asked. Where do these companies get off donating millions of dollars to politicians and then asking for billions of dollars of bailouts? The entire stock market is now just a casino, where companies pour in millions of dollars to the Washington slot machine, hoping to receive payouts in the form of tax breaks, direct subsidies, and bailouts.

One wing appoints to the Treasury Department a "lifelong Republican from Goldman Sachs who started his career at Merrill Lynch." The other appoints to the Treasury Department a "lifelong Democrat from Merrill Lynch who started his career at Goldman Sachs. "The only change we can believe in is that, with Democrats in charge of the legislative and executive branches, it will be their wing of the bigger government party that decides which corporations deserve the transfer of wealth.

Most people, even those in foreclosure, don't understand the foreclosure process and how it effects their exact situation. There are many steps in the process and each state and county can handle foreclosure differently from the next. Because of this, it can be very complicated for the victim. Many people seek advice from the Internet, but they find outdated information, or information that is not relevant to their situation. In any foreclosure case, we recommend getting a professional review, from a qualified agent who works in your state. This can eliminate any questions or misguided information. For the purpose of this article, we will simply be explaining the different actions that may happen throughout the legal process of mortgage foreclosure.

Obviously, by missing a mortgage payment, the homeowner forces the lender or servicing company to begin the collections and the foreclosure process. There are many other reasons a home can be foreclosed on, such as taxes or other court orders, but for the most part, it is because of missed mortgage payments. Once a payment has been missed, the collection process starts. Most mortgage contracts have an acceleration clause, which allows the lender to demand payment of the entire mortgage once you begin to miss payments. Once this clause has been evoked, the homeowner will owe the lender for the entire mortgage balance, missed payments, late fees, and legal fees. In most cases, though, the lender only wants the mortgage to be brought up to date. They want the total arrears, which is the missed payments and the extra legal and late fees. The lender will no longer accept your payments at this point, unless you are able to payoff the full arrears.

While this is happening, their attorneys are also filing a lis pendens with the local courthouse. Most people consider this filing the official beginning of the foreclosure process. A lis pendens is a notice to the court that a legal action is taking place and it essentially prevents the owner from selling or obtaining additional liens against the home until the lawsuit is settled. This notice is also provided to the owner and is published in local newspapers.

In a judicial state, you will be provided time to defend your case, or pay the arrears in full to settle the case. During this time, you could also work with the lender to establish a loan modification or repayment plan. If you can prove that the home is affordable under a new payment plan, the lender should be willing to work with you. If the court rules against you, a sale date will be set; this is usually called a Sheriff's Sale or Trustee Sale. This is where the home is sold at public auction and the proceeds are used to pay off any liens against the home.

Many states offer a redemption period, where the home can be purchased back, even after the sale. If you live in a state with a redemption period, you must be able to pay sale price in full to redeem your home. This is usually very hard, because getting a new loan after foreclosure is nearly impossible. You will need to find cash to purchase your home back.

After the sale and any redemption period, the owner must move out of the home and the new owner will take possession. If they refuse to move, they will be evicted. In most cases, the previous lender buys the home at the auction and the home becomes a REO (Real Estate Owned) property. They buy the home at the auction so they can sell it on the open market for a higher price. In today's market, lender are becoming more reluctant to buy these properties, because they are responsible for taxes and upkeep until the home is sold.

Another term that is often heard with foreclosure is short sale. A short sale is when the lender allows the owner to sell the home, at a loss, before the sheriff's sale takes place. When a lender allows a short sale, it is because they don't want the property and they would rather get rid of it as soon as possible. Even though it may seem like the lender loses money on a short sale, in the long run, the lender probably saves thousands.

Foreclosure is a very complicated process and every situation is slightly different, so if you are facing foreclosure, make sure you find information that works for your situation, or better yet, find someone who can provide specific help for your situation. You should always seek professional or legal help when facing foreclosure, so get a fee foreclosure evaluation today and learn more about your options.

This is simply too weird, but it seems that a specific type of fish is being used in California to assist authorities in keeping abandoned, foreclosed homes from turning into breeding grounds for mosquitoes carrying malaria or West Nile Virus. Where both swimming pools and foreclosure are common, the danger arises of the pools being left full or filling over time with rainwater and becoming standing pools of mosquito-infested water.

Treehugger.com states that, "The swimming pools of abandoned homes are perfect mosquito breeding grounds, there are worries about rampant West Nile Virus infections. In California, authorities are using airplanes to find green pools and are filling them with the Gambusia affinis, or mosquito fish, which eats the larvae."

The numerous articles on this so-called "foreclosure fish" are fascinating, although the little mosquito-hunter also has problems of its own: "In most cases they ate local wildlife in addition to mosquito larvae, and often didn't even do a better job of mosquito control than local fish were already doing." Maybe if the fish are confined only to the pools of abandoned homes, this issue would be taken care of?

In any event, the real life foreclosure fish story is also reminiscent of the "Bart the Mother" episode of The Simpsons, when lizards that eat birds are first feared and then perceived to be a help after destroying the town's pigeon population.

Skinner: Well, I was wrong. The lizards are a godsend.
Lisa: But isn't that a bit short-sighted? What happens when we're overrun by lizards?
Skinner: No problem. We simply unleash wave after wave of Chinese needle snakes. They'll wipe out the lizards.
Lisa: But aren't the snakes even worse?
Skinner: Yes, but we're prepared for that. We've lined up a fabulous type of gorilla that thrives on snake meat.
Lisa: But then we're stuck with gorillas!
Skinner: No, that's the beautiful part. When wintertime rolls around, the gorillas simply freeze to death.

Here are some of the articles that the above quotes from news stories were taken from:
www.conservationmagazine.org/articles/v9n4/foreclosure-fish/
www.treehugger.com/files/2008/06/the-forclosure-fish.php
www.newscientist.com/blog/environment/2008/06/foreclosure-fish.html

Finding a legal defense to foreclosure can seem like trying to locate a needle in a haystack. Although there are tens of thousands of pages of regulations on the lending industry, and thousands more on the procedures that must be followed even to begin a foreclosure lawsuits, finding which laws the bank violated during the term of the mortgage may seem an insurmountable task for the average homeowner. But banks do make these mistakes all the time, and rely on the inability of borrowers to figure them out.

But any fraud, mistakes, or violations made during the origination of the mortgage loan have been quickly covered up through the mortgage securitization process. Loans are packaged into mortgage-backed securities (MBS) and sold to holders which then use trustees to administer the loans. The trustees can not be held accountable for many claims that homeowners have against the company that originated the mortgage.

Trustees, although they may administer the loans, do not lose money when a property goes into foreclosure, as they are paid their fees in any event. The holders of the mortgage securities will lose money as homeowners stop making payments, but one property or another going into foreclosure is a small matter when even one mortgage-backed security may be comprised of hundreds of different loans spread throughout the country. This illustrates the concept of spreading risk around, but it also makes it less worthwhile for MBS holders to care about one or another borrower.

Even further removed from the origination company, MBS holders, and trustees are the mortgage servicing companies, which are hired to collect payments and perform the day-to-day operations necessary to administer the loan. These companies will also be compensated regardless of the success or failure of the loan, and so have little incentive to help homeowners apply for loan modifications or otherwise save their homes.

But homeowners are unable to get at the end holders of the securities or the trustees in order to negotiate a deal if they fall behind on payments. If the origination company is not already out of business, all the rest of the parties are protected from legal responsibility and loss in case of default. Only the investors that purchase parts of the securities and the homeowners themselves suffer monetarily as a result of a foreclosure, and they are unable to speak with each other to modify a mortgage.

Thus, no one at the servicing company cares terribly much if the homeowners are pushed into foreclosure or not. This is one reason why most companies offer only a forbearance agreement, keeping the original interest rate and payment the same but giving borrowers the ability to pay extra every month to get caught up. Even if they offer a modification, though, it can be expensive and nothing more than an elaborate set-up for the borrowers' inevitable failure.

Servicing companies are also paid a flat fee for administration of a mortgage, so it is quite a bit easier to push the loan to a local law firm to pursue foreclosure. It is also less expensive than spending the time and hiring the personnel necessary to work with homeowners on a solution that will help them stop foreclosure for the long term. Although mortgage holders lose more money on a foreclosure than a modification, servicers that actually work with the loans every day lose more money in a modification.

If a mortgage servicer even offers mortgage modification programs at all, they are usually taken care of by the least-paid help in the country, if not the world. How much a customer service representative from India or Sri Lanka understands the problems of the American housing market is yet to be determined, but this is really not even that important. Some of these outsourced loss mitigation departments are not even given the authority or knowledge to modify a loan for a qualified borrower.

Thus, working with a mortgage servicing company, for many homeowners, may simply be a dead end, as the companies have no reason to care about making sure the loans have the best chance to succeed. The executives and attorneys for the servicing companies and the trustees, however, are required to care about these mortgages and mitigate the losses to the end holders of the MBS and property owners. When a trustee is involved, mortgage servicers are often forced to negotiate and negotiate a deal that works out in the homeowners' interests.

This is why borrowers must use their legal defenses against those responsible for the mortgage, rather than the parties who are just paid flat fees to push homes into foreclosure when they fail and force them through the courts as quickly as possible. The important point to remember is that mortgage holders suffer more from a foreclosure than a modification, whereas the profits of servicing companies suffer more from modifying a loan than just dumping it onto a local attorney to foreclose quickly.

One of the most pernicious aspects of the housing boom was that so many professionals, on so many levels, took advantage of the ignorance of the average American in regards to all things financial. From the local mortgage broker and appraiser to the largest Wall Street firms, it seems everyone played some role in using the government's manipulation of the market to their own advantage.

Since the passage of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), appraisals for residential properties were to have been done by independent appraisers. But this is now how it works in the real world, as real estate agents, mortgage brokers, and even homeowners themselves will actively seek out appraisers who are willing to inflate (or deflate) the value of a home to meet loan requirements.

Obviously, the widespread use of manipulated appraisals has played a huge role in the myth that real estate values almost never go down. But now that property values have declined, with every homeowner that realizes the loan he or she obtained was $100,000 higher than the value of the property, more of this pressure on appraisers is being discovered.

But such fraudulent tactics and predatory lending practices on the ground put homeowners in positions where they area able to take advantage of laws to fight the lenders who relied on overstated, inaccurate incomes and inflated appraisals. And the practices of the lenders were no better, as many loans were calculated with incorrect Annual Percentage Rates (APR). The APR is the real interest rate that borrowers pay after fees, charges, and other expenses have been added in to the loan and is often higher than the stated note rate.

The miscalculation of the APR, while a blatant example of mortgage lender misconduct, is just one common mistake made on loans. Banks rarely, if ever, explain loan terms thoroughly enough to borrowers to make them understand how their mortgage works. Lenders set families up to fail, and then blamed the victims for failing to understand loan products that the banks should not have made in the first place if they knew borrowers did not know how they would work.

In fact, many lawyers and financial professionals who work for mortgage companies did not understand the complexities of the average subprime adjustable rate mortgage, let alone how the securitization process works, or who would end up owning the loan if it went into foreclosure. So it is inconceivable that borrowers themselves could be expected to know how these mortgages would work, especially since the most they were given in terms of explanation usually meant a couple pieces of paper written in confusing legal language.

Finding the fraud, misrepresentations, and neglect, though, gives homeowners the upper hand in negotiating for a solution to foreclosure. Banks, in order to defend against allegations of mortgage fraud and risk a class action lawsuit or regulatory action, are usually willing to spend tens of thousands of dollars on legal representation. Modifying a loan and offering reasonable terms to borrowers is much less expensive and time-consuming than fighting a lawsuit in a local court for the next two years.

And possibly the best part about all of this is that, with so many laws and regulations floating around, it is almost inevitable that lenders will blatantly violate one or another. But they rely on homeowners to be ignorant of these laws and willingly roll over once the foreclosure process begins. This is one reason every borrower who is threatened by the bank with the loss of their home should have competent research done on the loan.

One of the myths of the housing crisis is that it was caused by homeowners who took out greater loans than they could afford, while banks gave them the benefit of the doubt that they would be able to make an adjustable payment for the long term or would be able to refinance quickly. But nothing could be further from the truth, as banks new they were lending money to people who would never be able to pay it back and it would be a small miracle if they were able to find a more stable loan to refinance into.

The mortgage industry also knew that the boom in real estate prices could not last forever, which only fueled the drive to create more loans and gain more market share in the least amount of time. Almost every Wall Street investment firm handed out piles of money to subprime lenders in order to purchase, securitize, and sell the loans that were originated. The long term viability of these loans were not taken into consideration in the scramble to loan out more money and dump the resulting mortgage securities into the secondary market.

The fastest and easiest way to expand the market for mortgages was to give home loans with a low introductory rate to people who could not qualify for a normal payment. The terms of these loans were often not disclosed to understanding home buyers, who were essentially promised a complete financial program instead of an adjustable rate mortgage. Borrowers who had to overstate their income just to afford the teaser rate were assured they would be able to refinance before the rate adjusted because their property would appreciate -- because real estate always goes up in value.

It is really quite amazing how wrong the mortgage brokers, real estate agents, and Wall Street investment firms got it. But even more unfortunate is that these poor homeowners are the ones that are paying with homelessness and loss of quality of life because they believed in someone else to help them navigate the increasingly complex world of consumer credit and home loan programs. Once mortgages began adjusting, homeowners defaulted and tried to sell; but with so many new homes being constructed already, dumping more properties onto the market depressed prices rapidly in some areas, resulting in waves of foreclosures.

And now, it is all of us, homeowners, renters, and everyone else, who must pay the price for the large scale mortgage scam that was perpetrated on the American people. While subprime lenders have gone out of business by the hundreds, they were merely conduits for Wall Street money. Wall Street, after losing the mortgage cash cow, has been clamoring for bailout after bailout, which has been given to them by the Congress and the Federal Reserve. All of these bailouts have been granted to the financial industry, and now even the insurance and automotive sectors are counting on taxpayer money from taxpayers who can not afford even their own mortgages or credit cards.