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With such a great shift in the housing market, foreclosure rates keep going up. Until there are laws passed to change foreclosure law, consider that there are some options you can use before your home goes into foreclosure.

If you’re currently delinquent on your mortgage payments, or are facing foreclosure, be sure to investigate all of your options. Remember that plenty of things can happen to either stop foreclosure or reverse foreclosure. If you haven’t investigated these options, do so right away:

First, try to negotiate with your mortgage lender, which works for several reasons. Banks don’t like foreclosure any more than you. They don’t get back the cash they need to lend, and often lose money on an auction. With so many more defaults and foreclosures, some banks will simply negotiate lower interest rate terms, thus lowering your monthly payments.

Second, you can try to refinance. If you got stuck with an adjustable rate mortgage (ARM) with increasing payments and were able to get your house for no money down, this might not be such a good option because you probably have little or no equity or actual cash value in the home. Skittish and cash-strapped lenders are becoming more cautious about who they lend to, so don’t count on being able to refinance after that ARM starts biting back with higher monthly payments.

Third, you do have some legal recourse, especially if you live in a mortgage deed state where legal action is required before foreclosure beings. If nothing else, exhausting all of your legal options can tie up foreclosure proceedings even longer, giving you more time to figure out what you’re going to do.

Fourth, you put the house up with a real estate agent and hopefully sell in time to pay off the mortgage. Going into default and curing, or paying off a loan will hurt your credit somewhat, but this isn’t as devistating as foreclosure. The only problem is, if you live in a neighborhood with a lot of foreclosures, you might not be able to sell the house for enough money to pay off the mortgage.

You can do what’s known as a “friendly foreclosure” and simply give the deed of the house to the bank in exchange for the mortgage debt. This is an option only if there aren’t other lien holders on the house, like a second mortgagor, or a tax lien.

You can pay off the debt or make a substantial effort to pay it off. This means paying all of your back mortgage, along with fees that have accumulated. Some people can manage this, but usually a person is in foreclosure because they couldn’t afford to do this.

Finally, you can sell to an investor, the people who are probably already calling you and sending you business cards in the mail, wanting to “help you with your foreclosure problem.” Sometimes these investors can be a good option, but there may be some slimy investors in the bunch. Don’t believe them when they say that selling to an investor will “save your credit.” It won’t. Don’t take the first ridiculously low offer. Be sure you know what you’re getting out of the deal.

Remember that you do have options. Fight for your house if you’re in foreclosure. After all, the bank is fighting to take your house. Why not fight to keep it?

Believe it or not, I am somewhat of an insider in the home foreclosure market. No, I’m not a real estate agent or real estate broker. I’m not a mortgage lender. I’m simply a writer who has written a few books and articles on the subject of home foreclosures. I keep track of the data. I read many of the articles. If you’re looking for a get-rich-quick scheme, stay far away from foreclosures.

In my hometown of St. Louis, I was watching TV late one night, only to find an ad for a conference being held at some hotel in the city. The gist of the gathering was for you to spend a couple hundred of your hard-earned dollars in exchange for a “surefire” way to get rich off of the real estate market. Certainly the coming recession won’t bother you when you’re making tens of thousands of dollars a month, right?

Unfortunately, these foreclosure schemes are set up on false pretenses. Below, I’ve listed some of these scams for you. Avoid at all costs:

• Often these programs will tell you to purchase property in foreclosure or preforeclosure, that point at which the owner has defaulted on a mortgage but ownership still resides with the homeowner. The idea is to take these peoples’ homes for far less than they’re worth and quickly flip them. Generally this means finding a way to screw over someone who’s in dire financial and personal straights. Real nice, huh?
• Next, you’re supposed to find a way to quickly flip the property by selling it for much less than market value, meaning a buyer is sure to take it. Unfortunately, these real estate gurus forget to mention that, in today’s tanking housing market, there just aren’t any buyers. That’s why home prices are going down in the first place. This is simple supply and demand that these predatory types are trying to avoid telling you.
• If a real estate guru tells you to “invest in short sales” or “make money in buying notes,” these are code words for sticking it to people in times of crisis. This usually means taking their homes for far less than they’re worth, sticking the homeowners with the damage to their credit and any remaining loan debt. Sometimes this can mean taking control of a person’s home out from under them! Shady, indeed.
• Never let anyone tell you that, simply because prices are down, now is the good time to get into the business of flipping houses. If you can’t afford to buy houses, you can’t afford it. It’s as simple as that. Buying properties you can’t afford with the hopes that you can move them quickly will cause much more heartache for you. Don’t buy ANY property you can’t afford.