Many new home owners that bought in the past few years did not do enough homework on ARMs, interest-only and other types of home loans. They also bought more house than they could afford. This is the main cause of the boom in foreclosures. 1.26 million foreclosure filings were reported in 2006, up 42% from 2005, with an average rate of one filing for every 92 households. Colorado has the highest home foreclosure rate in the country and if other states reach those levels there will be even more pressure on the housing market.
If you are in a situation where you might lose your home there are some steps you can take to avoid foreclosure.
Try to Refinance Your Mortgage Loan
Before you get in too deep seek a lender or mortgage broker that might be able to assist you. Do not sit around and hope that things will go better–be proactive.
Try to Modify Your Current Mortgage Sell It
Banks have no desire to foreclose–they are not in the home buying business. This fact might help you if you try to alter your current loan.
Sell Your Home
You might not want to sell your house, but it is better than losing it to foreclosure. The current housing market is not the best, but you can at least contact some realtors to find out your options.