One of the best things that I can recommend

One of the best things that I can recommend to you is that you approach the request for assistance in a very businesslike manner. By that I mean, you should look to secure their interest just as you would expect if you were the one providing the funds to someone else in trouble. The greater degree of security that you can offer them in protecting their funds, the greater probability of successfully obtaining the funds necessary to stop the foreclosure.

* Borrow from institutional lenders. A third option is to borrow from institutional lenders to bring up back payments. This can be done by refinancing, or simply by borrowing against the equity in the home. These lenders will primarily consider equity when determining approval of a loan. Equity is defined as the difference between the fair market value of the home and what is owed on the mortgage. Refinancing is when you take out another loan in order to pay off the existing mortgage. When refinancing to avoid foreclosure, you may be able to obtain a lower interest rate, a longer payment period, and/or a lower monthly payment which would make your mortgage payments more affordable. Usually lenders that become aware that you have fallen behind in the mortgage payments will shy away from lending to you, so if you expect to borrow from an institutional lender, you must act very quickly before your credit reflects any late payments. If the lender is aware that you are in default, they will probably refuse to lend, or offer an loan with much higher interest rate to account for the borrower's inability to meet their financial obligations.

* Borrow from private party lenders. There are individuals that have funds to invest and are looking for a higher return on their investment than can be obtained by depositing their monies with savings institutions. These individuals are expecting a high rate of return on their cash investments, and understand that the loan that they are funding is a high-risk loan. Usually, once the homeowner falls behind in their mortgage payments, it is increasingly difficult to borrow money. These private lenders usually consider the equity in the property when making the loan. Because the borrower is behind in their payments, the lender cannot look upon the borrower's ability to repay in a timely manner as the primary basis for qualification. The lender looks for the security of their investment to the ability to recover it based on the property's market value and what is owed by the borrower on the property. Almost without exception, these loans carry a much higher interest rate than the normal home loans obtainable at banks or other lending institutions. They are, however, many times the only option left to a homeowner in foreclosure

* File for Bankruptcy

There are two chapters dealing with personal bankruptcy; Chapter 13 and Chapter 7. The main difference between the two chapters is that Chapter 13 helps individual debtors pay off their debt with court supervision and protection while Chapter 7 eliminates, or in legal terms, liquidates, the debtor’s debt. Based on this simplistic definition alone bankruptcy may seem like the simplest and best solution to your financial problems. However when considering filing bankruptcy be aware that it is not an action that simply frees you from your debt, it is a complex legal process that has weighty financial consequences. For most debtors it is not the best option and should be considered as a last resort after all other options have been investigated or attempted. Individual financial circumstances are so different that you should seek the counsel of a financial planner or accountant and a bankruptcy attorney in order to discuss your particular financial situation and the implications of a bankruptcy. If you do not have an established relationship with an attorney, I would recommend that you get two or three opinions.

6. Sell the Home. Many times, the best solution for someone that has fallen behind in their payments is to sell the home, and thereby recoup 100% of their equity minus selling costs. Unfortunately, many homeowners get caught up in the emotions of the hardship and overlook the realities of their financial circumstances. Almost as if with blinders on, they stagger about hoping for a magic solution, sometimes waiting until it is to late to come up with a rational plan. If a homeowner can reasonably assess their finances and determines that they cannot carry the financial load, they might be much better off selling the property and preserving the bulk of their equity until they are again able to become homeowners, if they so wish. They must act quickly so that their credit is not ruined by the failure to make their mortgage payments on time, or by using the bankruptcy process just to forestall the sale of the home. Don't let your equity be eaten up by the high costs inherent in loans made to those in distress. Sell the home and preserve the most important or valuable part, namely the Equity!

Unfortunate circumstances befall many of us as we go through life. Protect your financial health by being proactive when these problems occur. As long as you act quickly and take steps to preserve your assets, you should be able to avoid going into foreclosure. If you do go into foreclosure, following these guidelines should minimize the pain of the process. Seeking assistance promptly from professionals in taxation, law, and real estate will improve your chances of handling the process well.