If you or someone you know is headed toward foreclosure, or are already in foreclosure, you need to know your rights and options now. Only then can you save your house… save your credit… and save your equity before it’s wiped out forever.

Foreclosure can mean the loss of your home, any equity in your home, your credit rating and your dignity. Foreclosure is a very public process, with your name listed in the public court records and then published in your local newspaper.

A foreclosure usually means that you won’t be able to buy another house for several years unless you agree to the awful high interest rates which can be twice the rate of regular mortgages.

But what if you’ve experienced a temporary hardship? Life is unpredictable and we all experience circumstances in our lives that we cannot control. Often times these circumstances can prevent us from making our monthly mortgage payments on time. If you have experienced one of these situations it can severely impact your ability to pay your mortgage obligation. If you have experienced a temporary setback, you may have several options available to you to stop the foreclosure of your home. Here are several proven strategies to avoid a foreclosure:

1. Mortgage Modification - most often used if you have experienced a permanent reduction in income and can’t afford a repayment plan. In this case, the terms of the loan may be adjusted (the interest rate is lowered or the term is extended) so that monthly payments become affordable.

2. Forbearance Agreement - typically used if you have experienced a temporary hardship that is now over and you can resume making your regular payments. A popular option when you can’t pay all of your past due mortgage payments at once. Here the lender agrees to move your delinquent payments to the back of the loan.

3. Repayment Plan - the preferred method of most lenders. Here the lender agrees to let you catch up the back payments by adding a portion of the past due amount to each current monthly payment until the account is current again.

4. Mortgage Refinance - you may elect to refinance your delinquent loan with your existing lender or a new lender if you faced a temporary financial setback, had good credit prior to the setback, and can prove that you can now support the new mortgage payment. Usually not an option in other situation unless you agree to very high interest rates.

5. Deed in Lieu of Foreclosure - here you voluntarily convey the deed to your property back to the mortgage holder in order to prevent a foreclosure. By accepting the deed, the lender releases you from personal liability on the loan.

6. Sell your Home - you may choose to sell your house prior to the foreclosure auction. Lenders may postpone the foreclosure auction to allow you time to sell the home. If you are unable to work with your existing lender, or find a new lender, then it is time to get serious about selling. The longer you wait, the more likely you will need to sell your house quickly, most likely to an investor who will buy the house as-is and close quickly, but will pay less than fair market value.