When the foreclosure of your home by your lending institution seems to be looming just around the corner, it can be a frightening and embarrassing situation. But if you happen to be facing foreclosure, it's important for you to contact your lender, have an open, honest discussion about your difficulty, and then try to work with them to come up with a short-term alternative plan that will get you back on track when your financial situation improves. You'll generally find your lender to be sympathetic and eager to help.

In some surprising results, a 2004 Freddie Mac study showed that borrowers who contact their lenders and work out a customized payment plan can reduce their chance of losing their home to foreclosure by an amazing 80 percent! Among low-to-moderate income borrowers, the figure is somewhat lower, but it's still right around 68 percent. Either way, those figures represent a significant chance for you to save your home -- and they are options well worth pursuing.

Wells Fargo Home Mortgage also discovered a similar trend in their own recent study, and as a result, the company has begun to actively try to educate borrowers about what their options are when they find themselves in financial difficulty. The Wells Fargo study mirrored the Freddie Mac findings, but the truth is that most lenders will be similarly helpful when a borrower contacts them and lays out their situation so an amicable agreement can be arranged.

Make no mistake: facing foreclosure can be one of the worst times in a person's life, but you CAN save your home if you're willing to summon the courage to talk openly and honestly with your lender to find a short-term solution to your current financial woes.

Remember, your lender doesn't WANT to own your home, so they'll generally be glad to work out an arrangement to help you keep it. If you want to get some ideas about what kinds of arrangements can be made, call your lender and ask them about a "Workout Plan."

Don't wait. If you're late with a mortgage payment, gather all your mortgage information, figure out what you can do to make up past payments, and call your mortgage company.

Copyright © 2006 Jeanette J. Fisher

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