How Do I Stop a Foreclosure?
During the current recession there have been an unprecedented amount of foreclosures in the United States. In the metropolitan New York area thousands of homes are going into foreclosure on a monthly basis. It is important if you are having financial difficulties that you are aware of the necessary steps to avoid foreclosure or to neutralize or minimize its impact.

Don’t Give Up
Consider your options early. If a lender initiates the foreclosure process it will have a devastating effect on your credit rating and make it virtually impossible for you to refinance or purchase another home in the near future.

There are a number of options available to individuals facing foreclosure:
1. You can sell your home and avoid the foreclosure process.
2. If your home is under water, meaning worth less than the amount of the mortgage, you can do what is called a short sale.
3. You can try to renegotiate with your lender the terms of your loan.
4. You can ask your lender for a forbearance agreement. A forbearance agreement is an agreement to make reduced or modified payments. A forbearance arrangement usually reduces or eliminates your payments for a short period of time and makes up down the road for the reduction in your payments.

To qualify for a forbearance agreement, you must provide the lender with detailed financial records and demonstrate that your financial circumstances will most likely improve in the future.

Loan Modifications
There are a number of loan modifications programs available today. President Barack Obama has pressured banks and other financial institutions to cooperate with lenders who are in financial difficulty to modify their loans. Examples of loan modifications are that a lender may take the missed payments and put them at the end of the loan. This would extend the loan for a longer period of time. The lender may also convert an adjustable rate mortgage to a fixed rate mortgage or reduce the interest in the mortgage to 3%.

Filing for Bankruptcy
Foreclosure proceedings are handled in state courts. Bankruptcy filings take place in federal courts. Under the supremacy clause in the United States Constitution, when the federal court intervenes, the state court action is stopped. The technical term for the stopping of the state court proceeding by a bankruptcy court is called “an automatic stay.” This stops all state court action in the foreclosure proceeding until your bankruptcy ends or gets dismissed.
The foreclosure on an individual’s home involves potential loss of the most valuable possession a family has. This should not be taken lightly. You should not run away from the problem. You should face up to the problem and look for the best possible solutions. Contacting a knowledgeable foreclosure defense law firm is a good first step.