Def: Foreclosure - Procedure whereby property pledged as security for a debt is sold to pay the debt in the event of default in payments or terms.

Foreclosure is a word that many households in America know all to well today. Ten years ago, most homeowner’s may have heard of the term, but never knew the true meaning as we see it now. With that being said, the best way to avoid foreclosure is knowing the signs and taking quick action.

The number 1 key is to NOT ingore the problem. As you get further and further behind on your mortgage, you will continue to dig yourself in a deeper financial

hole and make it harder for you to escape the reigns of housing debt.

The next step is to contact your lender as soon as you know that there is a problem. It is in the best interest of the lender to keep you in your home and continue your loan as that is how they make their money. Lenders typically have programs and options to help when times of trouble and uncertainty lurk.

Next, cut back on unnecessary spending and save. For example, instead of eating out for lunch 5 days a week. Why not try buying in bulk on the weekend and cooking meals for the entire week? This and cutting back on entertainment(ex. rent a movie instead of going to one) can drastically decrease the money you see going out every month.

Also, identify assets that you have and don’t really need anymore. Maybe an extra car or large electronic items that you could sell to give you some additional liquidity.

Finally, you also want to avoid foreclosure prevention companies as they usually charge a large fee to help you tackle your accrued debt.

Bottom Line for avoiding foreclosure:

- Don’t ignore the problem
- Contact your lender for help
- Cut back on wasteful spending
- Liquidate personal assests
- Avoid foreclosure prevention companies

Keep these few bullet points in mind and you’ll be a successful homeowner for many years to come!