Defaulting on a loan or going through foreclosure is a scary prospect for anyone. These days, it’s a fairly common occurrence. While the government’s plans to halt foreclosures and offer aid are rolling out, we've put together a guide for working through foreclosure and related issues.

When You Fall in the Danger Zone

The worst thing you can do is freeze if you find yourself falling behind on your mortgage payments. The best thing you can do is call your mortgage provider and explain your situation. These day banks are willing to work with their customers to keep them in their homes. Some banks, like Citi, are allowing unemployed borrowers to pay less on their monthly mortgage payments.

The next thing you can do is triage your costs. See if you can cut expenses in other areas of your life to make your mortgage payments. Check out our budgeting section for some help here.  

If you owe more on your home than it’s worth – don’t go into panic mode. Just because you’re underwater doesn’t ultimately mean you have to face a foreclosure.

One way to stall foreclosure proceedings is to request that your lender “produce the note.” Mortgages have been sold and resold so much in this market that it may take your bank some time to find the original note as proof you owe them money.

Defaulting on Your Loan

Defaulting on your mortgage payments isn’t the same as foreclosure. If you’re in default but work with your lender or other services to cure the situation quickly, you may be able to avoid foreclosure.

It’s Not just a Home Owners Problem

Renters might have to deal with foreclosure too, if their landlord is in trouble. The laws and regulations are a little tricky – read on to find out what you need to know if your landlord is in trouble .

Foreclosure Resources

HUD, and lenders Freddie Mac and Fannie Mae offer tips and services on their websites for homeowners dealing with foreclosure.

Do you qualify for the new housing bailout? The Treasury states that the plan will help up to 9 million Americans. Read the official mortgage plan Q&A to see what it’s all about.

The non-profit Operation HOPE provides a mortgage crisis hotline for free here: 888-388-HOPE (4673)