1. Loan Modification

2. Deed in lieu of Foreclosure

3. Short Sale Negotiations

1. Loan Modification

With the increase of interest rates on home loans, many homeowners with adjustable rate loans are faced with mortgage payments they can no longer afford.

Our job is to convince the current lender that it is better to lower the homeowner’s payment by lowering the interest rate or payment rate by creating a payment plan the borrower can afford, rather than to take the home with a foreclosure sale and lose money on the re-sale. Keep in mind, lenders lose money on bank owned properties as it will sell for less than market value, and they must pay a commission to a Realtor; and closing costs plus the cost of holding the property while they wait for a sale in a market that is depreciating.

We need to prove to the lender what the maximum payment is that borrower can afford by constructing a financial plan for the homeowner that the lender will approve.

Also, as the homeowner is often late with their payments and in foreclosure or soon to be in foreclosure, we need to ask the lender to take the delinquent payments and either forgive them entirely or place them on the back of the loan.

A rate reduction in most cases is the only possibility for a homeowner to retain their home –our fee is a risk that each homeowner must weight. Note: Our success rate on a workout program with a rate reduction is 98%.

Note: If we can prove you owe more that the value of the property and there is a second loan, we can convince that second lender to take a major reduction –of 50% to 80% — off the balance of the loan.

2. Deed in Lieu of Foreclosure

Under many conditions lenders will accept the property back from the borrower as full payment in order to save the time and expense of going through the foreclosure process.

Our job is to convince the lender it’s in their best interest to accept the property as payment in full.

This is not a simple plan as we must provide the lender with a complex detailed analysis of current value of the property –and future value. Then we must prove that the borrower cannot afford to make payment or sell the home any time soon or at all.

Note: a deed in lieu will also prevent the lender from filing a 1099 on their loss which is regular income to the borrower.

3. Short Sale Negotiations

We realize there is a large demand for this service and doesn’t seem to be very many companies that know what a Short Sale is, much less how to work with lenders to negotiate a Short Sale. Here is what we know:

· There is a right way to put together a Short Sale offer so a lender can justify settling for your offer. But most offers are badly done and leave a lot of cash on the lender’s table.

· While most Short Sales are on residential properties, they can be, and are, completed on commercial properties that are also in troubled areas.

Why would a lender allow the property to be sold and accept a loan payoff that is far less than the amount of the home loan and not come after the homeowner for the losses? Simple: to save time and money.

Here is what we do –we ask the investor to complete a very detailed list of information on the property and area, we review that information with the investor and create a plan to purchase.

We make a proposal to the lender using what we call the poison pill approach,

“Keep in mind it’s a lot less work and risk for the lender to take our offer.” The Department Manager of the lender will use our proposal to justify the sale price and protect his job.

For more information, visit www.AForeclosurePro.com

And once you have had a bad credit rating it is almost impossible to avoid detection.
A network of credit reporting agencies keeps track of every person who buys on credit.
Each time you apply for credit, the prospective lender will check your credit with at least one of these agencies.

But Did You Know…both Employers and Insurance companies also make
determinations about you based on your credit score? That means that you could be paying higher insurance rates, or be passed over for that better job or promotion because your credit score is too low. We estimate the average person with below excellent credit scores could be penalized $12,924.00 or more each year for low credit scores! (See our report “Keeping Bad Credit Costs More Than Repairing It “ for more info)

It is easy to see how low credit scores have the ability to hold a family down, and keep
you from getting ahead.

How Do Credit Scores Work? (The Basics)
A Credit Score is a number assigned to a consumer that, based on 5 principal
determining factors, statistically determines the probability that you will become 90 days late or more on any loan obligation over the next 2 years.

- The FICO score is the most widely used scoring system, and is what most mortgage
lenders use.
- There are three (3) major credit bureaus in the U.S. who have business relationships
with thousands of creditors across the country, and that is why you may have three
"scores" that are being reviewed. Those creditors will "report" the information they have
about you to these credit bureaus at various times. They do not have to report their
information to the bureaus, and some creditors only report to one or two of the bureaus.

Therefore, it is very hard to increase your credit score if you don’t know to whom
your creditors are reporting.

- A credit score is calculated by taking all of the various information about your credit
profile and running that data through a computer model, where points are added and
subtracted based on a "perfect" credit model. (This "model" is proprietary information to the FICO organization) Once the calculation is complete, out pops a credit score for
that bureaus’ credit file on you.
- When we are referring to your credit score in the mortgage business, we are talking
about the middle score out of the three (not an average, but the actual score that is not
the highest or lowest).
- Credit scores are affected by almost everything about your credit data, ranging from
the length of time you have had an account, to the ratio of the balance available vs. the
balance owed. And of course there is the obvious negative impact of any derogatory
history.

The Good News - Rebuilding Your Credit

Millions of dollars are spent to convince you that nothing can be done about your bad credit. But it’s Not True!

If you are one of the millions of Americans who have had credit problems, do not despair. Even with negative items in your credit file, such as collections, late payments, liens, bankruptcies, or foreclosures, we can help! There is no kind of negative item that we do not regularly see removed from our members credit reports.

First Financial Freedom Foundation offers credit repair services through an affiliated attorney network. Everyone knows that under the law, if you are accused of anything, the burden of proof lies with your accuser. In other words, if the credit bureaus are going to promote and sell information about you that can cause you economic hardship, they must back it up to the full letter of the law. An Attorney enforces your consumer rights.

Congress has provided consumers the right to challenge information that is deemed to be inaccurate or information that is not properly validated under the law must be removed regardless as to whether it is accurate or not. Regardless of the accuracy, credit bureaus are often unwilling to invest the resources necessary or unable to get the credit grantor to invest the resources necessary to properly verify the disputed item.
Oftentimes, it becomes a matter of economics. If the case is presented properly, it is
often more difficult and expensive for the credit bureaus to substantiate the item
than to simply remove it.

The law requires more than a form letter to verify that an item is accurate. If the credit
bureau confirms an item on your report, the assigned attorney will “ratchet up” the
intensity of our challenge and represent it. This forces the bureau to invest additional
time and expense to conduct the new investigation.

For more information, visit our website at www.CreditRestorePros.com

Simply put, Home Sellers should repair their credit before selling a home and buying a home. It’s easy to get out of focus when you concentrate on your current home’s selling price. Points, prepayment penalties and higher interest charges on your new home can easily erase all the profits you gained in the sale.”

There is a difference between strong credit and the credit needed to obtain a mortgage. Indeed, you can buy real estate with poor credit but you’ll pay higher, non-prime interest rates. Consider: a mortgage loan of $150,000, 30-year, fixed rate mortgage, interest rate of about 5.72% will cost approximately $870 monthly. With poor credit, the interest rate could easily exceed 9% costing over $1,200 in monthly mortgage payments. That means that, over the course of the mortgage, you could pay the price of a second home in mortgage payments simply because you didn’t take the time to repair your credit.

To review your credit rating, check www.annualcreditreport.com

To repair or improve your credit rating, visit www.CreditRestorePros.com

When buying a home or selling a home good credit can be a big difference in mortgage payments which could help you buy the home of your dreams or purchase an additional property, so do what you can to have the bets possible credit rating.

Here is a great article and video on Reverse mortgages, from MSNBC.

NEW YORK - A “credit recession” sparked by the U.S. housing market downturn and excesses in structured finance may last more than two years, and the financial sector will undergo “massive consolidation,” leading Wall Street strategists said on Wednesday.

The fallout from deteriorating subprime mortgages and the broader housing and credit crisis will eventually lead to a healthier market, but not until after a prolonged purging process, Jack Malvey, Lehman Brothers Holdings Inc’s chief global fixed-income strategist, said in New York.

“We’re going through a tough spell with regard to credit,” Malvey said at a Securities Industry and Financial Markets Association conference.

The “subprime debacle” due to years of excess and easy credit will be followed by years of tight credit, Malvey said.

Malvey spoke a day after his company’s stock plunged to close at nearly a five-year low on concern that Wall Street’s smallest surviving major brokerage may need to raise more capital. On Wednesday, the Wall Street Journal reported that Lehman is seeking capital overseas.

Malvey said global diversification will be a “good remedy” for investors seeking to offset losses from the downturn. “This is the biggest blowup that we’ve had,” the strategist said.

Financial shares have been among the worst performers this year.

Financial earnings have suffered due to exposure to so-called structured finance debt and collateralized debt obligations, repackaged bonds whose underlying securities may be based on assets such as risky subprime mortgages.

Investment manager Loomis Sayles, one of the biggest U.S. bond fund managers, has been buying Lehman debt over the past several days, its vice chairman said on Wednesday.

“The credit is good at Lehman,” said Dan Fuss, vice chairman of Boston-based Loomis Sayles, which oversees more than $100 billion in fixed-income securities. Lehman’s common shares, which fell 18 percent over three days, are “dirt cheap,” Fuss said.

‘Massive consolidation’
Richard Bernstein, chief investment strategist at Merrill Lynch & Co Inc, said that in the last market cycle downturn, about 25 percent of financial firms — including brokers, banks and asset managers — “went away,” he said, referring to bankruptcies or mergers and acquisitions.

Only 7.0 percent of financial firms have failed or been acquired so far in this crisis, Bernstein said.

Like Lehman, Merrill’s earnings have suffered due to structured finance.

Bernstein also faulted U.S. government proposals to broadly modify U.S. mortgages, which may create a “moral hazard” that encourages future risky behavior, he said.

“Washington is misguided in focusing on mortgages,” Bernstein said. The federal government should focus on “job creation and people keeping their jobs,” Bernstein said. “That is the key to rectifying this situation.”

Five-year credit default swaps on Lehman Brothers widened by about 17 basis points to 275 basis points, or $275,000 a year for five years to protect $10 million of debt, according to data from Phoenix Partners Group.

Lehman Brothers’ bond spreads widened about 10 basis points overall, according to traders.

Put an end to your credit problems… it costs MORE to keep bad credit than to RESTORE YOUR CREDIT STANDING. Why would you want to pay MORE to have so much LESS???

Automobile Financing: If you are financing a car and have bad credit, you are probably paying thousands of dollars more than you would pay once you had restored your credit. This extra interest shows up every month in a dramatically higher payment. One of the first things that our members often do once they have restored their credit is to refinance their automobile for a fraction of their current payment or buy twice the car at nearly the same payment. Take a look!

Home Mortgage: The “American Dream” of owning your own home is out of reach for most people with credit problems. As you see below, even mildly damaged credit will cost a small fortune in additional interest. This forces credit challenged consumers to raise families in less desirable neighborhoods and to pay off someone else’s mortgage for them leaving the credit challenged with only several years worth of rental receipts.

It is difficult to fully restore your credit without paying your outstanding debts. However, paying off a debt can actually hurt your credit. Negative items on your credit report are allowed to stay on your credit report for a maximum of seven (7) years, except for bankruptcy that can stay for up to ten (10) years. This 7 or 10-year clock begins ticking at the date of last activity. Making a payment represents new activity and restarts the clock. When paying an outstanding debt, you will change the account status to paid collection, paid charge-off, satisfied judgement, or paid ‘was xxx days late”. This is still considered very negative and appears as though you had to be strong-armed by the credit bureau to pay the account. It is almost always prudent to have a professional help so as to not further damage your credit by trying to do the right thing.

Myth # 2 - If a negative item is successfully deleted from my credit report, it will just come right back on my report.

The credit bureaus have cleverly spread this myth through the news media and government agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they have not heard from the credit grantor for 30 days since an item has been disputed. Should the credit grantor submit verification a week or two later, it will be re-inserted. (This is called a soft delete.) Most of the time the creditor simply fails to respond and the negative item is permanently deleted. If the creditor verifies the item the account may still be deleted later in the process as the challenging process is intensified.

Myth # 3 - There are items such as bankruptcies, foreclosures, and tax liens that are impossible to remove from the credit report.

There is no type of negative listing that our attorneys have not successfully removed from a credit report - thousands of times.

Myth # 4 - Disputing a credit report is easy.  Any consumer can do it themselves.

Disputing a credit report is easy. Getting results from the credit bureaus as a layperson is amazingly difficult, complex, and infuriating. The Federal Trade Commission receives more complaints against credit bureaus than any other type of business . In February 2000 the 3 major credit bureaus paid a fine of 2 ½ million dollars for ignoring consumers requesting information regarding their file. Remember the credit bureaus are primarily interested in protecting their profits. Investigating consumer disputes consumes these profits. Short of sparking a mass number of lawsuits, the bureaus do everything in their power to impede your progress with credit restoration. Restoring your own credit is like repairing your own transmission or representing your self in court; it is possible, but you have to be willing to invest the time to learn the processes, assume the risks of your inexperience and realize that it will probably take you longer and you probably will be less effective than a professional.

Myth # 5 - The credit bureau allows me to submit a 100-word explanation as to my side of the story. Creditors will read my statement and take it into consideration.

No known creditors consider the information submitted in you’re statement. This statement only verifies some of the negative items on your report. The 100-word explanation should be the first thing deleted from your credit file.

Myth # 6 - The credit bureaus are…a branch of the government, infallible, or otherwise above reproach.

The credit bureaus are publicly traded companies in business to impress stockholders. They are not government agencies. In fact, they are one of the most heavily regulated industries. The strict regulations stem from a public outcry of abuses and mistakes. A recent survey by an independent research group revealed that 70% of credit reports contained mistakes or errors. The prevalence of errors has lead to consumer protection legislation that allows consumers to challenge the bureaus and force the removal of inaccurate, outdated or unverifiable information.

Myth # 7 - I can create a totally new credit file by getting a federal tax ID number or changing a few numbers on my social security number.

This fraudulent scheme has proven to be complex, difficult and illegal. Lying on a credit application is a criminal offense and with the linking of computer systems it is virtually impossible to get away with. It is in your best interest to hire adequate representation and face the music by confronting the credit bureaus armed with the rights congress has granted you through the consumer protection laws.

Myth # 8 - If I build enough good credit, it will offset my bad credit and make me creditworthy.

Any amount of bad credit is devastating to your chances of being approved by a creditor. The approval is almost never in the hands of a human sitting across a desk from you. It is a computer achieving a point total. The slightest amount of negative credit will cause an auto loans interest rate to skyrocket. Generally, even a little bad credit (regardless of the amount of good credit) will cause you to be declined.

Myth # 9 - Nonprofit organizations like Consumer Credit Counseling Service (CCCS) can help me restore my credit.

Nonprofit debt counseling services assist people who are over their heads in debt and are seeking an alternative to bankruptcy. CCCS are funded and controlled by credit grantors and credit bureaus. When you are working with CCCS your creditors will often note this on your credit report. This is a huge red flag for prospective credit grantors - treated the same as Chapter 13 bankrutcy. Some of the very worst credit reports that we see are or have been participants in the CCCS or similar programs.

Myth # 10 - It is illegal for creditors to take off a negative-listing on my credit report. The law requires that these items remain on the credit report for at least seven (7) years.

When you speak to credit grantors, collection agencies, or credit bureaus, their typically under-educated staff may tell you all manner of such pseudo-legal nonsense. The law "limits" negative information from appearing longer than the legal seven (7) year maximum. The credit grantor or credit bureau may choose to delete the item whenever they see fit (Or, whenever our attorney convinces them to).

Give me a call and I will help you get started on the road to good credit! www.CreditRestorePros.com

"…. the agency shall not be required to comply with paragraphs 2, 6, and 7 with respect to that dispute if they delete the tradeline within 3 days."

The Credit Reporting Agency can delete a disputed trade line for 30 days, then, the trade line can appear when the furnisher (creditor or collector) reports it again in the next cycle. That is because the CRA is not required to tell the furnisher you disputed it thanks to section 2 being omitted.

Further more , you lose your rights to request "Method of Verification" so you lose this powerful tool in the dispute process thanks to Paragraph 7 being omitted.

Never dispute errors on line if you want them permanently removed. if you are going to dispute items on your credit report, do it in writing, and do it by certified mail with a signed receipt.

54 percent of the credit reports contained personal demographic identifying information that was misspelled, long outdated, belonged to a stranger. or was other wise incorrect.

According to Ed Mierzwinski, USPRIG Consumer Program Director, "It is outrageous that inaccurate credit reports could damage one-in-four consumers’s ability to buy a home, rent an apartment, obtain credit, open a bank account, or even get a job."

At First Financial Freedom Foundation , we help people fix this problem!

Stop Foreclosure with Loss Mitigation Programs

Loss mitigation programs were established by the federal government and the mortgage industry in order to stop home foreclosures. They help foreclosure victims in default on their mortgages to find alternatives to home foreclosure. Every homeowner’s situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Our extensive experience and solid working relationships with mortgage lenders allows us help you avoid the common pitfalls that many homeowners encounter while trying to work things out directly with their lender. After performing a thorough assessment of your personal finances and analyzing your lender’s loss mitigation policies our professional loss mitigators will negotiate with your lender to get you the best possible solution to your home foreclosure problem. We can help you save your home and credit history through a variety of loss mitigation options:

REPAYMENT PLAN

If you have incurred a short term financial hardship and your loan is two or more months past due, your loss mitigation specialist will also consider submitting a request for a payment plan to your lender for approval. Only after reviewing your financial situation will this option be considered. All clients must be able to show that they can afford this plan in order to be eligible.  Click here if you want to talk to a loss mitigation specialist about participating in this program.

SPECIAL FORBEARANCE

(FHA loans only)(Type I and II)

If you have incurred a short term financial hardship and your loan is 90 days to 365 days past due, the loss mitigation specialist will also consider submitting a request for a special forbearance. A special forbearance is designed to provide you with more relief than is possible with a regular repayment plan. Typical approval can result in spreading the repayment over 12 to 18 months. Type II - can be utilized in an unemployment situation whereby the promise of future employment is present. We have done VA loans that resulted 27-month repayment plans.  Click here  if you want to talk to a loss mitigation specialist about participating in this program.

LOAN MODIFICATION

If you have incurred a long term financial hardship, our office can assist you in supplying the appropriate information to lender to take the appropriate measures to modify the term(s) of your mortgage. This could lower the interest rate and/or extend the term of the loan resulting in lower payments. There are costs and fees associated with a modification that you will be responsible for. All property taxes must be current or you must be participating in an approved payment plan with your taxing authority to be eligible for a modification. Any additional liens or mortgagees must agree to be subordinate to the first mortgage. All requests are subject to your lender’s approval.   Click here if you want to talk to a loss mitigation specialist about participating in this program.

VA LOAN MODIFICATION/REFUNDING

A refunding is when the VA buys your loan from the lender. Refunding may give VA the flexibility to consider options to help you save your home that your current lender either could not or would not consider. When the VA refunds a loan under 38 U.S.C. 36.4318, the delinquency is added to the principal balance and the loan is re-amortized. Your new loan will be non-transferable without prior approval from the Secretary. If your interest rate was lowered and an assumption is approved, the interest rate will be adjusted back to the previous rate  Click here if you want to talk to a loss mitigation specialist about participating in this program.

DEED-IN-LIEU OF FORECLOSURE

If you have incurred a long term financial hardship and your house has been on the market (at fair market value) for at least 90 days, you may be eligible for a deed-in lieu of foreclosure. To be considered for this option, you must complete a financial package and provide a copy of your recent active listing agreement. Also, there cannot be any additional claims or liens (other the mortgage) against the property. If you are approved for a deed-in-lieu, you will be giving up all rights to the property and the property will be conveyed to your investor. In exchange for the deed-in-lieu, the lender may waiver all deficiency judgment rights. You may be asked to participate in a Short Payoff program before a deed-in-lieu of foreclosure is accepted  Click here if you want to talk to a loss mitigation specialist about participating in this program.

PARTIAL CLAIM

(FHA mortgages only) (Some Freddie Mac Investor loans)

The loss mitigation specialist may assist in requesting a partial claim if you qualify. You may be eligible if your loan is 120 to 365 days past due. A partial claim results in placing your past due payments into a subordinate mortgage (2nd mortgage) between you and the Secretary of Housing Urban Development. The partial claim note will require you to start making payments when you pay off the first mortgage. There is no interest. The partial claim can be for no more than 12 months of past due payments.

Click here if you want to talk to a loss mitigation specialist about participating in this program.

1. Foreclosure is a process, not a thing.
   People often misuse the term "foreclosure." Foreclosure is a series of events, not a state of being. Lenders don’t foreclose on homeowners; they foreclosure on property.
   MORE…
2. The foreclosure process has four phases. The terms and length of each phase vary by state.
   Homeowners: Your rights and options vary depending on the stage your home is in and the state you live in. Know what laws apply to you. Buyers: The stage and state will determine the strategy you use.
   MORE…
3. A difficult financial situation doesn’t have to lead to foreclosure.
   There are several steps you can take to avoid foreclosure if your loan is about to adjust, you lose your job, or otherwise anticipate that you might miss mortgage payments.
   MORE…
4. The mortgage lender is not eager to take your house away.
   Lenders are not in the business of managing real estate, so they would rather work with homeowners to keep them in the house. And with the growing number of defaults across the country, your lender may be more open to cutting a deal.
   MORE…
5. You can sell your home immediately when foreclosure is looming.
   Even if you live in a tough market, being aggressive and keeping your home in good condition can help you get a speedy sale.
   MORE…
6. All is not lost once you get a notice of default.
   If you’ve missed more than three mortgage payments, you still have some alternatives for stopping the foreclosure process.
   MORE…
7. A short sale is better than going through foreclosure.
   Lenders don’t typically forgive mortgages, but in a market with lots of inventory, they would rather see the house sold for less than the mortgage, than deal with trying to sell it themselves.
   MORE…
8. Foreclosure has major legal, tax and credit consequences.
   Foreclosure will heavily impact your ability to borrow money in the future, so make sure you’ve exhausted all other options first.
   MORE…
9. Buying a foreclosure property doesn’t always mean you’ll get a bargain.
   Finding a turnkey property in the foreclosure market is rare. Oftentimes, the home will need some renovation. Crunch the numbers first to make sure you really are getting a deal.
   MORE…
10. Understanding your mortgage can help you avoid foreclosure.
    Many homeowners who end up in foreclosure say they were unaware of some crucial pieces of information about their mortgage. Read all the loan documents, ask questions, and consult with an attorney if you can.
    MORE…

Foreclosure is not the most cheerful thing to think about, but it is an element of reality every homeowner should be aware of and comprehend fully.

We fear what we don’t understand. The concept of "foreclosure" is frequently misunderstood and frequently feared. Understanding the concept of foreclosure with precision maximizes your ability to take action to improve your situation!

What Is Foreclosure?

• A legal proceeding which culminates in a mortgage lender selling or repossessing the home of a borrower who stopped making mortgage payments.
• A series of events that begins when a homeowner defaults — or stops making mortgage payments — usually because of a life crisis which impacted their income (examples: death, disability, divorce, etc.) or because their loan payments increased beyond their ability to pay them (example: when an adjustable rate mortgage begins to adjust). The series of events ends when the mortgage holder sells the home at auction, or takes the home back from the owner.
• HOMEOWNERS: Foreclosure starts when you are at least 90 days behind on your mortgage payment. Then, the foreclosure process is represented by a series of notices you get in the mail and even posted on your front door over a 4-6 month period of time telling you that you have two options: (1) either bring your past due mortgage current or come to some compromise with the lender, or (2) your home will be sold and you will have to move out. At the end of these notices is usually an auction, where the lender sells your home on the steps of the county courthouse or simply takes ownership of it, and you move out.Your options, rights and responsibilities change depending on what phase or stage of the foreclosure proceeding your home is in at any given moment.
• HOMEBUYERS: Foreclosure is a series of phases of "distressed" property ownership. During your house hunt, you might run into properties whose current ownership status is all over this continuum. Each place on the spectrum presents a different set of considerations — legally, logistically and from a bargaining perspective — impacting how desirable (or not) a property might be to you, as a buyer.

Bottom Line: When you buy a home using mortgage money, your promise to repay the mortgage loan is secured by the home itself. If you stop paying your mortgage for more than a 90-day period of time, the mortgage lender will set the legal wheels in motion to take the home back. Those legal wheels are, collectively, called "foreclosure."

NEXT: Learn the phases of the foreclosure process .

Foreclosure is the sequence of legal proceedings by which a lender sells or repossesses a home when the homeowner has stopped making payments on the mortgage. As a homeowner, understanding the individual steps of the sequence is critical to understanding your rights and responsibilities along the way.

These days, very few states require the lender to take the homeowner to court to foreclose on the home. The process in most states is known as nonjudicial foreclosure.

Stage One: Missed Payments In most states, a homeowner must fall 90 days behind on their mortgage before the mortgage lender can legally initiate the foreclosure process. So if you have missed fewer than three payments, you’re not actually in foreclosure. However, this phase is very important, because (a) you have to go through it before the foreclosure process can start, and (b) this is the phase in which you as a homeowner have the most options at your disposal.

If you are in the missed payment stage, this is the best time to rework your finances, to call your lender to work out a compromise, and to put your home on the market for a fast sale. Check out "7 Steps to Avoid Foreclosure" for specifics on what to do in the missed payments phase.

Stage Two: Pre-Foreclosure Once a homeowner’s mortgage payments have not been made for at least 90 days, the lender records a public notice that the owner has defaulted on their mortgage, and then mails the notice to the homeowner. In some states this notice is called a Notice of Default (NOD); in others, it is a Lis Pendens. Depending on the law in your state, the lender might be required to post the notice on your front door.

This pre-foreclosure stage is really a grace period; it gives a homeowner three calendar months to "cure" your default. What’s the cure? You can either work out an arrangement with the lender, sell the place or come up with the cash you owe. Read "5 Ways You Can Stop the Foreclosure Process" to kick-start your plan.

Stage Three: Auction If the default is not cured within three months after the Notice of Default is issued, the lender or their representative (the foreclosure trustee) sets a date for the home to be sold at an auction called a Trustee Sale. The Notice of Trustee Sale is recorded with the County Recorder’s Office, delivered to the homeowner, posted on the door of the property and published in a local newspaper — to make sure everyone knows when and where the auction will be.

This auction is either held on the steps of the county courthouse or in the trustee’s office. In many states, the homeowner has the "right to redemption" (he can come up with the outstanding cash and stop the foreclosure process) up to the moment the home is sold at the auction.

At the auction, the home is sold to the highest bidder. The big catch is that these auctions require cash payment in most states; few third-party buyers can afford to bring enough cash to the courthouse to pay in full. As a result, many lenders either simply ink an agreement with the homeowner to take the property back (called a deed-in-lieu of foreclosure — see No. 4 in "5 Ways You Can Stop the Foreclosure Process" ) or buy it back themselves at the auction.

Stage Four: Post-Foreclosure If a third party has not purchased the property at the foreclosure auction, the lender takes ownership of it. Then, the property becomes what is called a bank-owned property, also known as REO, short for Real Estate Owned (by lender).

REOs are sold in one of two ways. Most often, they are listed with a local real estate agent for sale on the open market; they are usually put on the multiple listing service (MLS) so that local buyers’ agents can show and sell the property to a qualified buyer for a commission. Some lenders prefer to sell their REO properties at an REO liquidation auction, often held in auction houses, at convention centers or at the property.

Steve’s Tip: If you are interested in buying a property in one of these stages of foreclosure, check out "The Advantages (and Disadvantages) of Buying a Foreclosure."
NEXT: Read the 7 Steps to Avoid Foreclosure

If you have missed more than three mortgage payments and/or your lender has instituted formal foreclosure proceedings, all is not lost. Check out "5 Ways You Can Stop the Foreclosure Process" to find out how you might be able to save your home.

Step One: Cultivate Clarity

Before you make the massive commitment of time, money and energy it might take to avoid foreclosure, make sure that saving your home is going to be worth it. If, for instance, you have extra mortgages and home equity lines of credit (HELOCs) on your home, it may not make sense for you to restructure that debt so that you still have a $500,000 mortgage on a home that is worth $300,000.

Step Two: Conquer the Fear

For many people, the prospect of being unable to make their mortgage payment paralyzes them with fear and anxiety. They stop opening the mail, start avoiding phone calls and procrastinate on paying the bills. The fastest way to feel relief if you are falling behind on your mortgage is to do something about it. Whether you gather your bill statements, apply for a new job or call your lender to explain your situation, moving into action will prevent you from waking up to find a Notice of Trustee Sale posted on your front door. By the time that happens, there is not much you can do to save your home.

Step Three: Increase Your Cash Flow

This may seem like a no-brainer, but it is sound advice. Consider doing some freelance work, getting a second job or taking in a roommate. Evaluate what you don’t use and don’t need; you wouldn’t believe the numbers of people who have spare automobiles, computers and other valuables they can sell. Slash unnecessary expenses; cable TV, massages and dining out must go. Cutting expenses will show your lender you are willing to make sacrifices, boosting the chances they will work out a compromise with you.

Step Four: Call Your Lender to Try to Work It Out

If you make a thorough, persuasive and specific request for a temporary or permanent loan modification, your lender might agree to help you. For more details see "How to Deal With Your Lender When Facing Foreclosure."

Step Five: Try to Refinance

If your mortgage balance is near or less than what your home is worth on today’s market, you might be able to refinance your home, get a lower interest rate, lower your monthly payment, skip a payment or two, or even receive some cash at the time you close the refinance transaction. Work with a reputable mortgage broker and try contacting a mortgage representative at your current lender; some lenders will do more to get you into a new loan with them than they will to modify your current loan.

Some nonprofit, alternative and governmental lenders now offer to refinance mortgages of homeowners in distress. For example, the Neighborhood Assistance Corporation of America offers a Home Save refinance mortgage with interest rates far below market averages. The Federal Housing Administration (FHA) has also set aside billions for the purpose of refinancing the loans of borrowers who have fallen behind on their mortgages.

Step Six: Put Your Home on the Market Immediately

If it looks like you will not be able to work out a solution with your lender or refinance your home, you should put it up for sale — immediately. Find a real estate agent who has successfully represented other homeowners you know and who has a track record of getting homes sold quickly. The faster you get your home sold, the less damage will be done to your credit and your psyche! See "How to Get Your Home Sold Immediately When Foreclosure Looms."

Step Seven: Bonus Step for Seniors

If you are over 62, you might have additional options. Consider reverse mortgages and advances on your future appreciation, which unlock the equity in your home. These programs all have serious implications, so consult your children, your financial adviser, your CPA and your estate planner before you agree to anything. If you would like me to help you go over your options with you, your family and advisors, call my office and schedule an appointment. I’ll be happy to help you make the right choice.

NEXT: Find out how to deal with your lender when facing foreclosure .

1. Explain your financial hardship and why it is/was temporary.
   If you lost a job, explain why and give details as to why you believe you will be re-employed soon. If your mortgage rate and payment are adjusting, explain that and show that you made your payments on time consistently before the adjustment.
2. Demonstrate that you have tried to improve your situation.
   Provide proof that you have been job hunting, have reduced your monthly expenses or have taken on a second job or a roommate to boost your monthly income.
3. Make a specific proposal or specific alternative proposals.
   Ask for what you want in verbal and written requests. Call your lender and speak to a representative in the workout or loss mitigation department. Have a discussion with him of what you are considering requesting, then get his name and fax number and issue your request(s) in writing. For example, if you currently have a 15-year fully adjustable mortgage with a current 7.25 percent interest rate for a monthly payment of $2,500, you might request that the lender extend the term of your loan to 30 years, change the interest rate from adjustable to fixed, and drop the rate to 6.75 percent for a monthly payment of $1,900. Consider providing several alternatives which would work for you if the lender cannot or will not agree to your first proposal.
4. Demonstrate that you are financially able to keep your end of the bargain.
   In the former example, show that you now have or soon will have the income required to make the payment you are requesting.
5. Make your request ASAP.
   As soon as you believe you might be in financial trouble and unable to make your payments, call your lender! While it’s true that some lenders will want to see you deplete your savings before they buy your hardship story, many prefer to do workouts with people who haven’t yet fallen behind; they believe responsible borrowers are more likely to live up to their end of the workout bargain.
6. Make a show of good faith.
   If you are significantly behind on your mortgage, you might need to beg, borrow or steal (well, don’t really steal!) to come up with some lump sum as a show of your good faith and commitment to keeping your home. Try to negotiate some payment greater than a month’s mortgage payment, but less than the total amount you are behind as your "down payment" on your workout arrangement. Then, pay it — exactly when you say you will. If you are late making this payment, your lender will lose all confidence that you will comply with the terms of the workout.

While a mortgage workout is less physical than your gym workout, it can be equally advantageous to your lifestyle. So stack the decks in your favor before you make that call, and good luck!

Steve’s Tip: When negotiating a workout with your lender and before you agree to any compromise, ask the representative: "How will this appear on my credit report?" Understand the credit implications of your compromise before you agree to it. If the compromise will be reported as a derogatory item, try to negotiate the manner in which your lender will report the arrangement to the credit bureaus. Your goal is to have it reported as "Pays as Agreed," but if you don’t get the lender’s agreement to do that before you agree to the compromise, you never will.

NEXT: Find out how to sell your home immediately when foreclosure looms .

When foreclosure looms, many homeowners try to sell their homes. For them, the goal is not just to get the home sold, but to do it quickly. Foreclosure rates are the highest in buyer’s markets, when homes take a longer than average time to sell. What’s a homeowner to do? Get aggressive, and get your home sold fast!

As a seller, you control the only three factors that influence whether your home sells quickly: pricing, marketing and condition. Here are some easy steps and insider secrets to make your home fly off the market in record time!

Pricing Your House

1. Don’t try to salvage equity that does not exist. The fact that you bought your home for thousands more than homes are currently selling for in your neighborhood is irrelevant to the current fair market value of your home. You have to get clear on your goal: Are you trying to eke dollars out of your home by holding out for the highest price, or are you trying to avoid the black mark that a foreclosure will leave on your credit report?
2. Don’t overprice your home. Get clear about what you want. If you’d like to get your home sold, make sure you price it aggressively and that means low. If your home is overpriced, some buyers won’t even see it because it will appear to be out of their price range. Other buyers will focus on seeing properties whose sellers seem more realistic about pricing. Your house will sit on the market longer than it should and then the lowballers will crawl out of the woodwork.
3. Get real about what your home is worth. Have your real estate agent prepare a Comparative Market Analysis (CMA) that shows recently sold, similar homes in your neighborhood. If you’re serious about getting it sold fast, take the sales prices (not the list prices) from the most recently sold homes in your area, and then go down 10 percent or so from there to get your list price. When a home is slightly underpriced, it seems like a bargain. More buyers will come out to see it, and chances of getting a qualified offer skyrocket.
4. Make sure you have an accurate understanding of how low you can go. A buyer is not going to pay a premium price for your home just because that’s what you owe. If you owe more than your home is worth, give your lender a ring, complete a short sale application (see "How to Get Your Lender to Agree to a Short Sale" ) and ask your lender to give you some indication of how low a sale price they will accept. Conform your list price to that (don’t forget to take closing costs into account); a short sale blemishes your credit but not as badly as a foreclosure does!

Next: Marketing Your House

1. Make sure your home is well-marketed on the Internet. This is your real estate agent’s responsibility, but you should make sure that it gets done. More than 80 percent of house hunters start their home search on the Web. So your listing should be on all of the top real estate listing sites like FrontDoor.com, Yahoo, Craigslist and Realtor.com. Internet marketing is virtually free; if your real estate agent posts your home on five sites, it costs you nothing but time to post it on 10 more. Some sites will actually syndicate your virtual flier to dozens of other sites.
2. There is no such thing as too many pictures. Property listings that have no pictures are skipped over by the majority of buyers. The more photos of your home are associated with the listing, the longer time buyers will spend looking, and they will be more likely to come see your home.
3. Condition, condition, condition. Clean it up, spruce it up, fix it up, but don’t spend too much. If you are facing foreclosure you probably can’t afford the time or the money it would take to do major work. Focus on the things that are inexpensive, but make a major cosmetic difference, like paint and carpet. Have your real estate agent refer you to a handyman who can caulk cracks in the tile, fix minor leaks, and patch scrapes and holes in the walls. These things are cheap to fix and make a negative impression if you don’t fix them. Make sure your place is immaculate every time a buyer steps inside. Piles, messes and odors are extremely distracting to buyers and can even cost you a sale.
4. Offer creative concessions and/or financing perks. Some house hunters who want to buy your house might have a hard time doing so. Help them out! Offer such concessions as assuming your mortgage (with the lender’s consent), a lease with option to buy, or closing cost credits that will help the buyer defray closing costs or buy down the interest rate.

NEXT: 5 Ways to Stop the Foreclosure Process

If you have missed more than three mortgage payments, or your lender has filed a Notice of Default (NOD), you might think the loss of your home is inevitable. Even at this stage, there are five strategies you can use to stop the foreclosure process.

1. Foreclosure Workout. Up until the time your home is scheduled for auction, most lenders would rather work out a compromise that would allow you to get back on track with your mortgage than take your home in a foreclosure.
2. Short Sale. After your lender files an NOD but before they schedule an auction, if you get an offer from a buyer, you lender must consider it. If they foreclose on your home, the lender is going to simply turn around and try to resell it; if you present them with a reasonable short sale offer, they may see it as saving them the time, effort and trouble of finding a qualified buyer in a soft market. So, if your home is on the market, continue to aggressively seek a buyer for it, even after your lender initiates the foreclosure process. Read our guide "How to Sell Your Home Immediately When Foreclosure Looms" for action steps you can take to unload your home fast, then make your best pitch as to why your