Following the unprecedented time of property price inflation, a lot of us are discovering that our homes are worth less than what we still owe on our mortgages. Due to job losses and the latest downturn in the economy, many of us are still earning far less than we did when the mortgage was used to buy our homes.

The collapse of the housing market has resulted in a nation wide economic instability.Homeowners get ninety days to to pay their mortgages and when they fail to pay their homes are repossessed by the lenders.Lenders are then forced to auction off these properties in order to make back their money and they also become hesistant in giving future home loans,fearing losses.

You may think there is nothing that you can do to keep your home, but there are actions you can take. Lenders are unlikely to initiate these actions on your behalf, so it is important to be proactive. Don't wait until you're close to foreclosure due to late payments. Contact your lender and find out if you can initiate one of the following options: refinancing, a loan modification, loss mitigation, forbearance, payment forgiveness, a repayment plan, partial claim, or short sales.

Free from mortgage payments, a forbearance provides a grace period. A late payment is waived as a forgiveness is provided. As repayment plans are allowed missed payments will be added to the regular payments, they will then be stretched out over a long period of time. Freezing the interest rates is what usually happens with the modification of the loan terms as well as sometimes adding length of the mortgage.

Refinancing is a term which means the full re-amortization of a loan under an alternative agreement. Borrowing money from another lender in order to repay tardy mortgage payments is what is known as a partial claim. Finally, the consequences of a short sale are the casualty of the house to the lender but this is often more preferable than foreclosure.

Each of these options must be granted by the lender. However, because a lender has refused to grant a particular option does not mean you will not qualify for a different foreclosure loss mitigation option. If you are experiencing financial difficulty paying your mortgage, the next step is to contact your lender, and thoroughly research all of the available foreclosure loss mitigation options.