According to data from RealtyTrac, an online marketplace for foreclosed properties, the number of foreclosures dropped during the second quarter of 2012 by 12% to 224,429 properties. While this is good news, there were over 1.8 million properties in the foreclosure process at the end of 2011.

If you’re facing foreclosure, it’s easy to feel overwhelmed and like there’s nothing you can do. But don’t avoid the issue; there are possible solutions to prevent your home going into foreclosure.

1. Contact your mortgage company

Contact your lender as soon as you become concerned that you won’t be able to make your payments. If you have missed payments, don’t ignore any calls or letters from lender. Call or write your mortgage company to discuss your situation. Some possible solutions include:

• Forbearance – Depending upon your particular financial situation, your lender may work out a repayment plan with you. Your lender may allow you to pay lower monthly mortgage payments or no payments for set amount of time. Once you begin making your normal mortgage payments again, you’ll pay your normal monthly amount plus an extra amount. Repayment plans usually allow you one year to repay what you owe and bring your mortgage account back up to date.
• Loan modification – Your lender may adjust the terms of your loan by lengthening the amortization schedule or lowering your interest rate to cut your monthly payments. Or, they may roll the past due amount into your loan and determine a new monthly mortgage payment so you can pay what you owe over time.

2. Sell your home as a short sale

During a short sale, your lender agrees to allow you to sell your home for less than what is owed on your mortgage.

3. Apply for a government loan modification program

The government has a number of programs available to help you with your monthly mortgage payments so you can avoid foreclosure. These programs include: Home Affordable Modification Program (HAMP), Home Affordable Unemployment Program, and FHA Home Affordable Modification Program.

4. File for bankruptcy

A bankruptcy will stop a foreclosure from proceeding, giving you time to get back on your feet and pursue other options with your lender. However, consult with a bankruptcy attorney to determine if this is a good solution for you.

5. Offer your lender a deed in lieu of foreclosure

With this option, you sign the deed to your home back to your lender and give them the house keys. However, not as many lenders accept a deed in lieu anymore. Plus, it still negatively affects your credit.

At Grandview Lending, we hate to see anyone go through the foreclosure process. One option you may want to consider is refinancing your home, especially if you’re less than 30 days behind on your mortgage payments. We can work with you to see if this may be an option for your situation.