prevent foreclosureIt is so easy to prevent foreclosure with a loan modification, which is the latest tool that lenders are using to keep people in their homes instead of walking away from homes they can no longer for whatever reason. The banks are working hard to prevent foreclosure because the foreclosed homes cost them a lot of money to process, hold, and sell to other buyers. And with lending requirements so tight right now, the banks could be carrying inventory for a long time before they unload those unwanted assets.

If it's looking like you are in precarious times, call your bank and see if they will arrange a loan modification for you. They want to help you prevent foreclosure, and a loan modification is the best way to restructure your loan so you can afford it. The banks can lower your interest rate so that you will be paying less on your mortgage every month. But before you sign the new loan documents, make sure you ask if they will let you do a short sale if you end up owing more than it's worth after the new loan has been originated. The next two years might be rocky for real estate, so while it's good to prevent foreclosure now, it's also good to know you have the ability to sell as short sale down the road.