For the second time in the last month, an Assist-2-Sell owner was quoted in USA Today.

May 14, 2008
USA Today
U.S. median home price falls a record 7.7% in first quarter
By Stephanie Armour  

Median home prices fell broadly in the first quarter of the year, spreading to such cities as Dallas, Seattle and Raleigh, N.C., that had largely weathered the national housing slump.

The median price of an existing single-family home - the point at which half cost more and half cost less - fell in 100 of the 149 metro areas reviewed by the National Association of Realtors, which issued its first-quarter report Tuesday. The median price rose in 48 metro areas and was unchanged in one. The percentage of areas that saw price declines - 67% - was the highest since the NAR began such record-keeping in 1979.

Nationally, the median U.S. home price tumbled 7.7%, from $212,600 in the first quarter of 2007 to $196,300 in the first quarter of this year. That was also the biggest percentage drop on record.

CHART: Median home prices in metropolitan areas

The fall in prices is further evidence of a deep housing recession that has pushed down home sales across the country.

"The national housing market shows no sign of a bottom," says Mark Zandi, chief economist of Moody's Economy.com.

"Sales, construction and prices are falling in most places across the country. The worst of the price declines are occurring where speculation, subprime lending and overbuilding were most prevalent. But no corner of the country is immune from the price declines."

The biggest drops were seen in the West, where median prices of single-family homes plunged 12.3% from the first quarter of 2007, to $296,300. In the Midwest, prices fell 7.9%, to $142,700.

Some price drops were severe, with double-digit percentage declines in such cities as Akron, Ohio, Grand Rapids, Mich., and many cities in California, including the Sacramento area.

Significant price declines occurred largely in urban areas where subprime lending was more common and prices had experienced sharp run-ups during the boom that largely came to a halt in 2006. Though subprime loans - for people with shaky credit - account for less than 10% of mortgages, they make up more than half of all foreclosures, the NAR says.

Subprime loans often impose higher rates, penalties for refinancing and mortgage payments that rise steeply once adjustable-rate loans reset. One in five subprime mortgages is expected to wind up in foreclosure, according to the Center for Responsible Lending.

But those who bought homes years before the slump in many cases are still seeing equity gains. The median rise in value for sellers who bought a home in the first quarter of 2002 is 24%; the median equity accumulation is $37,700.

Still, the drop in prices is causing worries for many homeowners. Some are "upside down" on their mortgage: They owe more than their home is worth.

"If you're upside down, you can't refinance, and you can't move," says Deede Wockenfuss, a marketing manager in Gilbert, Ariz., for Assist 2 Sell, which provides real estate services on a fee basis. "People are coming to me and saying, 'Please tell me what to do.' "

For the second time in the last month, an Assist-2-Sell owner was quoted in USA Today.

May 14, 2008
USA Today
U.S. median home price falls a record 7.7% in first quarter
By Stephanie Armour  

Median home prices fell broadly in the first quarter of the year, spreading to such cities as Dallas, Seattle and Raleigh, N.C., that had largely weathered the national housing slump.

The median price of an existing single-family home - the point at which half cost more and half cost less - fell in 100 of the 149 metro areas reviewed by the National Association of Realtors, which issued its first-quarter report Tuesday. The median price rose in 48 metro areas and was unchanged in one. The percentage of areas that saw price declines - 67% - was the highest since the NAR began such record-keeping in 1979.

Nationally, the median U.S. home price tumbled 7.7%, from $212,600 in the first quarter of 2007 to $196,300 in the first quarter of this year. That was also the biggest percentage drop on record.

CHART: Median home prices in metropolitan areas

The fall in prices is further evidence of a deep housing recession that has pushed down home sales across the country.

"The national housing market shows no sign of a bottom," says Mark Zandi, chief economist of Moody's Economy.com.

"Sales, construction and prices are falling in most places across the country. The worst of the price declines are occurring where speculation, subprime lending and overbuilding were most prevalent. But no corner of the country is immune from the price declines."

The biggest drops were seen in the West, where median prices of single-family homes plunged 12.3% from the first quarter of 2007, to $296,300. In the Midwest, prices fell 7.9%, to $142,700.

Some price drops were severe, with double-digit percentage declines in such cities as Akron, Ohio, Grand Rapids, Mich., and many cities in California, including the Sacramento area.

Significant price declines occurred largely in urban areas where subprime lending was more common and prices had experienced sharp run-ups during the boom that largely came to a halt in 2006. Though subprime loans - for people with shaky credit - account for less than 10% of mortgages, they make up more than half of all foreclosures, the NAR says.

Subprime loans often impose higher rates, penalties for refinancing and mortgage payments that rise steeply once adjustable-rate loans reset. One in five subprime mortgages is expected to wind up in foreclosure, according to the Center for Responsible Lending.

But those who bought homes years before the slump in many cases are still seeing equity gains. The median rise in value for sellers who bought a home in the first quarter of 2002 is 24%; the median equity accumulation is $37,700.

Still, the drop in prices is causing worries for many homeowners. Some are "upside down" on their mortgage: They owe more than their home is worth.

"If you're upside down, you can't refinance, and you can't move," says Deede Wockenfuss, a marketing manager in Gilbert, Ariz., for Assist 2 Sell, which provides real estate services on a fee basis. "People are coming to me and saying, 'Please tell me what to do.' "

Assist-2-Sell owner Kim Stimpson was quoted in today's issue of USA Today.  Also, Karen Degney, another Assist-2-Sell owner, offered her customer as a source to the reporter.  The home seller, Rosemary Johnson, is also quoted in the article.

April 25, 2008
USA Today
In housing market, it's the worst of times and best of times
By Stephanie Armour

Home sellers, brace for some grim news. The spring home-buying season now underway is widely expected to be the worst since the 1980s.

Many would-be buyers lack strong enough credit to get a mortgage. Home values are sinking. And in front yards around the country, "For Sale" signs are as ubiquitous as garden weeds.

The median price of an existing home in March was 7.7% less than it was a year ago, the National Association of Realtors reported this week. "Sellers are having to capitulate," says Mark Zandi, chief economist for Moody's Economy.com. "If you're a seller, it is the worst season since the early 1980s."

Yet, what's bad for sellers is good for buyers - at least those blessed with excellent credit and enough money for a sizable down payment. They can enjoy lots of homes to choose among, time to browse, and typically, the advantage in negotiations.

Still, whether buyer or seller, anyone engaged in the home-buying process now could probably use a little guidance.

HOME SELLERS: Be realistic

This month, Rosemary Johnson is taking a gamble. She and her husband, Robert, 59, own a two-bedroom cabin in Lake Tahoe, Calif., nestled in the pine trees by a golf course. But they've now moved to Los Angeles and no longer need their former home. Despite some trepidations about the floundering housing market, they've decided to sell their cabin.

"It's a scary market," says Johnson, 63, an artist whose husband is a builder. "We knew we had to price it very rationally. We had to be realistic, and we're just hoping to break even." Having listed their home at $649,000, the Johnsons spent time sprucing up the yard before putting the cabin on the market. Now, they're hoping for the best.

Taking a realistic view of the market and pricing a home competitively are wise strategies these days. Keep in mind that buyers will typically wield the advantage, so expect to be flexible or even to lower the home price as necessary.

What sellers should consider doing:

• Make a stellar presentation. Be sure the house is in near-pristine condition. Looks matter. Fix peeling paint. Make any needed repairs. Consider spending on amenities that attract buyers, such as newer appliances.

"In order to sell quickly for a good price, homes must be in better condition than the competition and be staged to look appealing from every angle," says Cleve Gaddis, a co-broker/owner of Re/MAX Around Atlanta. "The days of selling by just putting a sign in the yard and listing in the (multiple listing service) are over."

• Develop a marketing plan. Figure out how best to display and advertise a home for sale by targeting potential buyers who might be interested. This might include posting the home on websites, sending out mailings to neighbors, holding several open houses and analyzing comparable home sales in the area in the past six months.

• Price realistically. Nothing's more essential at a time when buyers expect prices to fall further and are typically in no hurry to close a deal than to price your home realistically. Don't expect to make much of a profit, if any. And try to hit on a price slightly lower than the competition. Lawrence Yun, chief economist with NAR, says prices could fall an additional 10% in some markets. Websites such as ZipRealty.com and Zillow.com allow sellers to get a rough idea of what their home is worth by browsing the estimated values of comparable area homes.

"All sellers today are selling their homes for less than they did a year ago," says Kim Stimpson, owner and broker of Assist-2-Sell, a discount Realty brokerage group in Boise.

• Offer inducements. Tempt buyers by dangling inducements, such as partial or full seller financing, suggests Pat Lashinsky, CEO of ZipRealty. Be mindful that you're competing for a smaller pool of potential buyers than in years past. Just 13% of respondents say they plan to buy a home within 12 months, according to an April survey of 1,938 participants by Frank N. Magid Associates, a media-oriented research and consulting firm based in Marion, Iowa. An additional 21% said they were unsure.

And sellers who are refusing to cut their listing price, betting they'll be able to sell their home once prices bounce back, should keep in mind that few analysts expect a broad recovery anytime soon.

"It's not going to be a great spring this year," says Orawin Velz of the Mortgage Bankers Association.

HOME BUYERS: Do homework

For many would-be buyers, the question is whether now is the time to dive in. Should they wait and buy at even lower prices? In the view of many experts, if a buyer finds an ideal home, with an affordable price and mortgage, there's no reason to wait.

"For buyers, now is a good opportunity to find a good deal and negotiate with sellers," says Lashinsky of ZipRealty. "There're a lot of choices out there. Inventory levels are going up, and home sellers are giving deals."

Today's housing market is radically different, of course, from the one that raged during the housing boom that crested in 2005. Back then, some buyers could purchase a home, then turn around and sell it within weeks, pocketing a profit. Now, with the real estate slump widely expected to persist, prices in many areas are likely to fall further. Today's buyers should expect to hold onto any home they buy for at least a few years before selling.

What buyers should know:

• Negotiate. Sellers, by necessity, have become more flexible about pricing. In some cases, buyers can insist on - and receive - perks or discounts such as seller financing and home warranties.

Carlos Arcos and his partner are in the process of buying a three-story townhouse in Houston for which they were able to negotiate the price. During their search, they found eager sellers throwing in flat-screen TVs and free window treatments.

"While looking for a new home, many builders were throwing out some great deals to buy new construction," says Arcos, 40, who works in advertising and whose partner, Norman Schack, 45, is a music instructor. "However, my partner and I decided to go with an older home, only 5 years old. Since we were dealing with sellers directly, I think we got a good price."

• Educate yourself. Thoroughly research prices in the area before making an offer. As home prices fall nationally, some cities are seeing sharper-than-average drops. In other areas, prices remain flat. Some metro areas, such as Charlotte, have actually seen some prices increase.

"We hear about the large price drops in California, Florida," says Leslie Sellers, vice president of The Appraisal Institute. "But it's important to remember that those are the areas that were increasing at the same rates in the upward direction in the past few years. More areas of the country are at a more stable pace, and those have not dropped at those dramatic paces."

Anyone considering buying a home in foreclosure or at auction should do plenty of research. Even then, the process can be difficult and risky. Auctions of homes, for example, often give buyers no chance to do any pre-inspection.

• Obtain financing ahead of time. Many private banks have sharply tightened lending standards, requiring heftier down payments and sterling credit scores. Even though buyers now have more choices, some desirable homes do receive multiple offers. Some buyers could easily lose out if they're not prepared.

Those who might face the toughest time, Velz says, are those seeking homes in the upper brackets. Banks burned by the rising number of defaults remain leery of offering "jumbo" loans - those that exceed $417,000 (or, temporarily, up to $729,750 in some high-cost areas).

"The worst market now is the jumbo market," Velz says. "It's basically shut down right now."

In a recent article about short sales, the Wall Street Journal included insight from Assist-2-Sell owner and broker Donald Schriver.

April 17, 2008
The Wall Street Journal
Why Lenders Are Leery Of Short Sales
This Foreclosure Alternative Helps Strapped Homeowners,
But It's Not Easy to Pull Off
By RUTH SIMON and JAMES R. HAGERTY

As more people fall behind on their mortgages, lenders have been slow to take advantage of a longstanding alternative to foreclosure -- a so-called short sale.

At first glance, a short sale might seem like a win-win for everyone involved. In such an arrangement, the borrower sells the home for less than the amount owed, with the lender forgiving the difference. The sale releases borrowers from their obligations. For mortgage holders, it can be less costly than foreclosing -- and could provide protection against future price drops. For buyers, it can be a chance to buy a home at an attractive price.

Short sales -- which were rare when the housing market was booming -- can also be a good way for lenders and investors to minimize losses. They typically result in losses of 19% of the loan amount, compared with an average loss of 40% for homes that are sold after foreclosure, according to a recent analysis by Clayton Holdings Inc., which tracks more than $500 billion in mortgage loans monthly for investors. The costs of foreclosure can include not only legal fees, but also taxes, insurance and the expense of maintaining the home until the property is sold and repairing any property damage.

As the housing market continues to weaken, the number of short sales is edging upward. Short sales currently account for about 18% of home sales, according to the National Association of Realtors. But it can be extremely difficult to get these deals completed. Unlike a traditional real-estate sale, a short sale requires the approval of not only the buyer and the seller, but also the mortgage-servicing company. In many cases, loans have been packaged into securities -- which means that the mortgage servicer must consider the interests of the investors who own the loans.

Deals can fall apart because the mortgage company rejects the price that has been agreed upon by the buyer and seller. Long delays in getting an answer from the mortgage servicer are another obstacle.

The process can be so frustrating that some real-estate agents and home buyers have decided that a short sale isn't worth the effort. Shari Adams, a paralegal, bought a foreclosed three-bedroom house in Stuart, Fla., after she tried twice to buy a home being sold in a short sale. One deal fell through when the mortgage servicer turned down her offer after six weeks and didn't make a counteroffer. Another deal collapsed because it wasn't clear that the seller was truly facing a financial hardship.

"I basically started to run away from any home listed as a short sale," Ms. Adams says.

Low Success Rate
The success rate for short-sale offers is low, real-estate agents say. Molly Kay Hamrick, president of Coldwell Banker Premier Realty in Las Vegas, estimates that 20% of short-sale offers in the area lead to completed sales, compared with 85% for more traditional sales. Redfin, an online real-estate brokerage based in Seattle, says it represented buyers on 65 short-sale offers in the first quarter but expects only two or three to result in a completed sale.

Because so many deals fall through, Jean Manner Schwimmer of Coldwell Banker Gay Dales in Salinas, Calif., advises buyers making an offer on a short sale to put a clause in their contract that says the deposit can't be cashed until it is clear that the sale has been approved by the mortgage company and the contract has been signed.

Many borrowers walk away in frustration because it takes so long to get a response from the mortgage company to their offer. Servicers take an average of 4½ weeks to provide an answer on a potential short sale, according to a recent survey of real-estate agents by Campbell Communications, with some taking two months or more to respond. By contrast, it takes an average of less than two weeks to get a response to an offer for a property that has been foreclosed on, the survey found.

"To make the process work, you have to have a buyer who just wants that property and is willing to wait three to four months," says Beth Butler, chief operating officer of EWM Realtors, based in Miami.

Alicia and Greg Green accepted a short-sale offer in December for a home in Los Angeles they had purchased as an investment. But the deal didn't close until late March because of delays in getting an answer from the mortgage servicer, Option One Mortgage Corp. At least two offers at higher prices fell through because of delays, says Bill Etchegaray, the couple's real-estate agent.

"Luckily, we didn't lose the buyer," says Ms. Green. "I thought we would because the process took so long." The couple sold the home for $299,000, well below the $375,000 mortgage balance. They fell behind on their payments when the construction business Mr. Green owned went under. A spokeswoman for Option One pointed to the complexities of arranging short sales and said the company is pleased that the sale was successful.

Coming up with what everyone agrees is a fair price can be tricky in a soft market. "Servicers are finding that people try to low-ball the sales price knowing that the property is distressed," says Vicki Vidal, a senior director with the Mortgage Bankers Association.

Missed Opportunities
But with home prices falling in many markets, a rejected short-sale offer may wind up as a missed opportunity. Donald Schriver, owner of Assist-2-Sell Good Sense Realty in suburban Phoenix, says a homeowner he was helping late last year was offered $190,000 for his house in a short sale but was unable to win approval from his mortgage company. The borrower later decided to abandon the four-bedroom house, which was built in 2005. The house is now in foreclosure, with an auction scheduled for June. Prices in the area have continued to fall, says Mr. Schriver, who believes that the most the home would now fetch is $180,000.

A spokesman for Wells Fargo & Co., which services the loan, said the company "made several unsuccessful attempts to connect with the customer" and didn't turn down an offer for a short sale.

Some mortgage-servicing companies are tightening up on short sales because they worry borrowers are rushing into these arrangements when there are better alternatives. In March, Ocwen Financial Corp., based in West Palm Beach, Fla., told its customers it would consider a short sale only after it had talked directly to the borrowers and determined there are no alternatives for keeping them in the home.

"We are concerned that some of our customers are not given all the facts," says William Rinehart, the company's chief risk officer. "In some cases, it's represented to them that a short sale is the only solution to the problem they are in."

Part of the problem may be that many mortgage servicers were ill-prepared for the spike in bad loans. As delinquencies have climbed, they have had to scramble to add staff. Mortgage companies say they prefer other means to help borrowers, such as a repayment plan or loan modification.

Clearing Hurdles

Gathering all the information needed to evaluate a short-sale offer can take time, says Patrick Carey, an executive vice president with Wells Fargo. The loan servicer must first determine whether the homeowner really can't continue meeting the loan payments, then get an appraisal or broker's opinion of the home's value.

Mortgage servicers also try to ensure that the proposed sale is an "arm's length" transaction between two parties rather than, say, a sale to a relative on sweet terms. They must also determine whether the buyer has sufficient funds or the ability to get a loan. If all those hurdles are cleared, the servicer may still need to get approval from the investor that owns the loan and provide an analysis showing that the investor will be better off with a short sale than with another solution.

There are additional complications if the borrower has a mortgage and a home-equity loan. In that case, both parties must approve the deal -- which is a challenge when the sales price may not even be enough to cover the mortgage balance.

To minimize delays, Mr. Carey suggests that homeowners contemplating a short sale immediately call the loan servicer to get the approval process started, rather than wait for an offer.

There are some signs that the process is getting smoother. In recent weeks, some mortgage companies have begun to approve short sales for borrowers who can show financial distress but haven't yet stopped making monthly payments, says Dan Elsea, president of brokerage services for Real Estate One in the Detroit area. Until recently, servicers wouldn't even consider a short sale unless a borrower was at least 60 days late.

Fannie Mae and Freddie Mac, which own or guarantee nearly half of all outstanding U.S. mortgages, both say they are trying to streamline the short-sale process. Fannie Mae says that it plans to introduce a policy in the next few months under which real-estate brokers would be given an advance indication of the approximate minimum price that would be acceptable in a short sale, a move designed to quickly weed out offers that are too low.

Freddie Mac says it has already given its top servicers more flexibility to accept short sales for homes backed by loans it guarantees or owns. Lehman Brothers Holdings Inc., another issuer of mortgage-backed securities, also is offering incentives in some cases for servicers to arrange short sales or loan modifications.

April 6, 2008
credXperts
Foreclosure: Is Walking Away an Option
Kathryn D'Imperio

Buying a home is one of life's most exciting events. You've scoured the listings, visited many properties, or perhaps only a few, and found the perfect home to suit your lifestyle. You've made it through negotiations, home inspections, moving out of the old place and into the new place. Now comes the tricky part - keeping up with your mortgage.

Foreclosure has taken many of our cities by storm, turning homeowners' worlds upside-down and destroying their faith in the housing industry. Many people buy the homes of their dreams, only to find out soon after that they cannot afford the mortgage payments, utilities, and other expenses of daily life. Sometimes homeowners close their eyes and turn their heads from these problems.

Foreclosure is an unfortunate and common result of missed mortgage payments. Being informed about foreclosure is the first step to surviving it. Homeowners should make it a point to learn what foreclosure is, how it happens, what happens during foreclosure, and the viable options for resolving it to give themselves a fighting chance.

What is foreclosure?

"Foreclosure is the last resort that a mortgage lender will take to recoup its money under a defaulted mortgage note," says Ethan Ewing, national mortgage expert and president of Bills.com in San Mateo, California. "It is a legal proceeding, generally resulting from the borrower's failure to make timely payments on the mortgage, in which the borrower loses his right to pay for the property, and thus redeem the legal title."

Ewing explains that lenders usually save foreclosure as a last resort because of its complexity and the expenses involved with foreclosing a home. When a home is foreclosed, the lender takes full title to the property, and the borrower relinquishes most rights to the property.

"I have seen many homeowner's well overextended," notes Jade Attar, a realtor with Brazen Real Estate in Bellevue, Washington. "Many home buyers that took that ride on the booming real estate market; many who were young, undereducated, and overconfident.

"After purchasing either one home or multiple, the downturn of the market (albeit cyclical and therefore temporary) has left them in a position of owing more than the property is now worth. Perhaps they cannot get their property rented and have a negative on top of a negative, 100% financing with high interest rates, high adjustments, etc. The alternative for most is to go into foreclosure."

Foreclosure is not a pretty thing. It usually starts out with letters from your lender or an institution and escalates to phone calls and written notices of the delinquent loan, among other intimidating communications. Those who ignore and avoid these notices often end up losing their homes in the end. That is why it is imperative to take a proactive approach to making timely mortgage payments and to communicating with your lender when the going gets tough.

What happens if I miss a payment... or two... or three?

Everybody has a tough month now and then. The incoming cash flow may be delayed or unexpected home repairs or car maintenance may suck up every last dime. It is so important to keep a slush fund available for times like these so that you don't have to put your mortgage money into other expenses. When all else fails, prioritize your expenses and delay paying those with the least impact.

"Not paying is not recommended," says GreenPath Counseling Manager, Candy Wright. "Whether you rent or own, your housing payment is the most important payment you have. GreenPath counselors and debt managers always recommend paying housing and utility payments first for that very reason. If you prioritize differently, you put your home at risk. Not making the mortgage payment puts you in 'default' on your loan obligations."

When you miss a payment, your lender will begin to notify you of the missed payment, and inquire as to when you expect to make up the payment. Wright specifies that the first month may hold a simple notice about the missed payment, with the second month including a phone call seeking the past-due amount. Once you reach three months without paying, you may receive formal written notice of the delinquent loan (sometimes called a "Demand Letter" or "Notice to Accelerate") and a 30-day window to bring it current to steer clear of foreclosure.

Wright says lenders may be less willing to accept anything other than the full amount due to bring the account current, in addition to the applicable late fees.

"It is still worthy trying, though," she says. "Don't give up."

Once the four month mark rolls around, most of the sand has already slipped through the hourglass. When the Notice to Accelerate expires without your payments or other arrangements being made, the lender's attorneys will likely begin foreclosure proceedings. Any legal fees incurred during this time also add to the delinquency, Wright says.

Individual state laws determine many of the details surrounding the foreclosure proceedings, and it's all downhill from there. The next steps may involve a hearing, or setting a date for the redemption and/or Sheriff Sale.

Can I negotiate with the lender?

As with many of life's problems - a hole in your clothing, a medical problem, a problem with your vehicle - a stitch in time saves nine. In other words, the sooner you take ownership and address the problem, the better off you will be, and the better your chances for resolving the solution and avoiding foreclosure. Remember that communication is the key to success in many fields, including this one.

"Now, there seem to be more options with grace periods, waiver of late fees and penalties, longer redemption periods," says Jade Attar of Brazen Real Estate. "There are banks that are offering to change terms of the note (interest rates) and adjustments on ARM's (adjustable rate mortgages).

"There are many banks and servicers that are in earnest of contacting and arranging terms with the borrower, that are far more realistic in an effort to keep them in the home and continuing to pay a more reasonable payment. For a borrower that would like to find a way to maintain a decent credit rating or simply keep themselves in their home and avoid foreclosure, this is a great time to renegotiate the terms of their home loan."

To begin renegotiating the loan, Attar suggests contacting the loan servicer and being honest about the difficulties you are facing under the current terms and conditions. Express your interest in putting your mortgage back on track in a way that allows you to confidently and comfortably make your payments.

What options do I have once I am facing foreclosure?

When the bank is knocking at your door, there are still a few things you can do to avoid foreclosure. First and foremost, handle the situation with as much grace and maturity as you can muster. Try to keep an optimistic attitude as you take the necessary steps to resolve the situation.

"Consumers should also be aware of how foreclosure will have an impact on their credit report," says Paul Lueken, president of The Illinois Association of Mortgage Professionals (IAMP) and the IAMP Educational Foundation. "Foreclosure is a hard mark to erase from your credit history and there are steps you can take to avoid the loss of your home instead. Communication with your mortgage broker or lender will help you navigate through the troubled waters of foreclosure before and after you find yourself facing such a situation."

GreenPath Counseling Manager Candy Wright reports that homeowners have several work-out options to consider when faced with foreclosure. She outlines the following options available to those in this troublesome financial situation: Temporary indulgence - Consumers following through with a temporary indulgence have a 30-day grace period to repay all past due amounts in a single payment. Repayment plan - Consumers and the lender agree on special payment arrangements to bring the account current. Wright reminds, "Always ask for this in writing." Interest-only payments accepted during a certain period of time may serve as another option.

Special Forbearance - The loan servicer agrees in writing to decrease or postpone the homeowner's monthly payments for a set amount of time.

Loss Mitigation Alternatives - Long-term hardships may prompt loss mitigation alternatives, such as:

Modification - A modification is a permanent alteration of the original terms to help the consumer to bring a defaulted loan current. Assumption - A qualified applicant takes over both the title to the property and the mortgage obligation from the homeowner who is currently delinquent. Pre-foreclosure Sale - Available from Fannie Mae only, this is a sale of the property with an agreement between the servicer and the homeowner that the proceeds of the sale satisfy the defaulted mortgage, even if it works out to be less than the amount owed on the home. This option runs as a last resort to avoid foreclosing on the property. Deed in Lieu - Another Fannie Mae last resort option, the homeowner voluntarily conveys clear property title to the lender in exchange for a discharge of the debt.

"Please understand that the lender does not want your house and will try to work with you," adds Paul Lueken, president of IAMP and IAMPEF. "The first thing you need to do after you have received a foreclosure notice, or a Lis Pendens, in writing, is to respond immediately. Consumers usually have 20 to 30 calendar days to respond. These 20 to 30 calendar days begin from the date you were served the Lis Pendens notice."

How can I avoid foreclosure? What are some good tips?

Real estate professionals agree: the best thing to do when you are on the brink of foreclosure is to contact your lender as soon as possible. Being proactive rather than reactive may be the difference between keeping your home and selling it or losing it to the bank.

"The worst thing you can do is avoid the phone calls, letters and/or visits from your lender," says Deede Wockenfuss of Buyers & Sellers Best Choice, Gilbert, Arizona. "There are many options. You can market your home as a short sale; get a mortgage modification agreement or even a deed in lieu of foreclosure. The sure way to go into foreclosure is to not talk with your lender. A realtor who specializes in this kind of situation will be well worth the call. You don't need to go it alone -you don't need to make those difficult calls to your lender yourself."

Erin Johnston of Assist-2-Sell Buyers & Sellers Realty in Springfield, Oregon suggests, "Call your lender immediately and tell them your situation. Most homeowners wait way too long before telling someone they need help. The bank doesn't want the house back, so lenders are often willing to work something out with a seller before they get months behind on payments and the outstanding balance gets too large.

"Once you have a large amount of outstanding debt and your house hits the public foreclosure list, the chance of getting a good price for your house or the bank working out options for you is almost completely gone. Call your lender immediately before it's too late."

Susan Jacobs of Assist-2-Sell Jacobs Team Buyers & Sellers Realty in Manassas, Virginia recommends that homeowners open all the mail from their mortgage companies promptly. She also urges consumers to contact their lender as soon as possible when it looks like they will miss a payment.

"Don't put your head in a hole and hope the problem will go away," she says. "This is the time to be proactive. Your mortgage company wants to help you! Depending on how far behind you are, they may be willing to work out a payment plan until you get back on track.

"Do not hand over your keys, and stay away from companies who promise to help. Most are scams. They take what little money you have and run. Or worse yet, they take your home. Many will tell you to file for bankruptcy, but this may just delay the process, and depending on your financial situation, you may end up with more debt than you started with."

Where or how can I get help?

GreenPath Debt Solutions, based in Michigan, is a nonprofit organization that offers free financial counseling and education to those who are facing financial troubles. GreenPath Debt Solutions boasts more than 400 counselors and runs 37 offices in seven states and provides services to the whole country through telephone and Internet services. Since 1961, GreenPath has delivered debt management and client hardship programs, in addition to the Federal Government's Hope Now Housing programs. Visit GreenPath online at www.greenpath.com.

The U.S. Department of Housing and Urban Development (HUD) works to increase homeownership and access to housing while also supporting community development without discrimination. Visit HUD online at www.hud.gov/foreclosure.

SIDEBAR: Tips on avoiding foreclosure from Paul Lueken, president of IAMP and IAMPEF

Paul Lueken, president of the non-profit Illinois Association of Mortgage Professionals (IAMP) and the IAMP Educational Foundation offers these tips:

Before You Miss a Payment:

Take out a loan product that makes sense for your individual financial circumstances. (Many specialists in the industry warn potential homeowners to be wary of interest-only and adjustable rate mortgages.)

Know how much you can afford for a house payment and don't be talked into more. Make sure that after you make your mortgage payment each month, there is enough money to cover your other expenses, as well as put money into a reserve emergency account. Use the equity in your house in a careful and a sensible manner; for example, don't use money from a line of credit to go on vacation.

After You Miss a Payment:

As soon as you are going to miss your first mortgage payment, contact your lender.

If you obtained your loan through a mortgage broker, ask your broker for guidance on the situation. Cut out any unnecessary expenses and try to trim your budget where you can. Don't make any large purchases. Be aware of "rescue" offers; if it sounds too good to be true it probably is. Don't sign any documents before thoroughly reading and reviewing. Work with your lender to determine if selling your house is an option or if there are any other options to assist in your circumstances. Talk to as many people at the lending institution until you find someone that will help you. Write down names and departments and keep a file of important information and highlights from conversations.