Here’s a nightmare scenario: You have bought your dream property and you are mortgaged to the hilt but managing. Just when you thought that you could make ends meet you lose one of your jobs and your wife begins to get ill. This is just the kind of situation which can turn a manageable credit crunch into a catastrophic scenario which leads to foreclosure.

It happens more often than it should and the question is, what can you do, if anything to avoid it?

For a start let’s get one major thing straight: lenders hate foreclosures. It means they will end up with a property on their hands they will have to sell at a loss, their administrative costs will sky rocket and their workload will shoot up and they will end up losing money. They do face a dilemma however as they cannot just let things slide either. After all, they are able to make sure everyone pays what they owe on time precisely because they are able to force a foreclosure and take a property in default away from its owner.

So where does that leave you? As a property owner who has, for one reason or another, fallen behind on payments you need to start opening up communication lines with your lender and fast. I understand that the moment you begin to fall behind on house payments you are struggling with many different issues and you are under pressure and the temptation not to respond or talk to your lender is great but that is the fastest and surest way to lose your house.

So, whatever pressures you are facing you need to make sure you establish contact with your lender. Be honest about the situation, explain what the problem is and see if something can actually be arranged. After all the lender does not really wish to foreclose on your house and if you come up with a temporary solution which will satisfy the lender and give you the room you need.  This will lead to the both of you being satisfied and you will greatly increase your chances of saving your property.

Each lender, of course, has different guidelines and procedures regarding missed payments, mortgages in arrears and negotiating with house owners. The thing here is to be realistic, resist the temptation to take advantage, offer genuine solutions, stress how temporary they are and why you need the breathing space, and see how far you can actually get and what arrangement you can come to.

Remember that this is a temporary situation designed to produce a win-win scenario: you get to save your house and the lender is satisfied that they will get their money back and you will bring the payments back up to what they should be. Approach it in this way and the chances of a foreclosure are greatly reduced.