Since 2007, the world has been dealing with the worst financial disaster since the Great Depression in the late 1920's and 1930's. Companies started to find themselves short on funds, the credit markets dried up and people began go default on their existing home loans. Because everything in our economy is so closely tied together, job losses occurred by the millions, which lead to loss of income for many families, which in turn lead to foreclosure. The term foreclosure simply means that when you can't make your mortgage payments, the bank has the right to remove you from the home and to take ownership of the property.

If you receive a Notice of Default, this means that you are being forced out of your home because you haven't made the payments on your mortgage. This is a worst case scenario, but doesn't mean that foreclosure will occur. There are ways to prevent foreclosure, even if you have received the Notice of Default.

Your first step to stop foreclosure is to call the lender and negotiate. Explain to them why you fell behind and offer suggestions as to what can be done to make up the missed payment. Some of the options that they may offer are listed below. Since the real estate market isn't too good in many locations, lenders may work with you, to avoid having to take the home, which would mean a significant loss to them.

1. Payment Forgiveness: This is when the creditor chooses to forgive the missed payments, if you can make future payments. This does not happen often.

2. Repayment Plan: Let's say that your mortgage payment is $1000 and you missed one. The lender may allow you to break it up into a few payments, and continue making your regular payment as well. For example, you could pay $250 for 4 months in addition to your regular payment to make up the missed payment.

3. Forbearance: The lender may give you extra time to make the missed payment.

4. Change the Terms: The lender may change the loan terms. For example, they may add the missed payment back onto the loan, adding just a small amount to the rest of your payments.