When a homeowner first discovers that they could be faced with foreclosure of their home it is easy to see that they will be unhappy about it. A person might understandably begin to think that there is nothing that anyone can do towards preventing foreclosure.

Preventing foreclosure is, however, attainable by applying just a few foreclosure stopping methods. There are a number of critical steps that anyone in a difficult financial situation needs to consider in order to save their home from a much dreaded foreclosure.

One foreclosure stopping method to consider is to look for an investor who is willing to buy your home for at least the amount you owe. This would relieve you of the burden of the loan without further damaging your credit. Depending on how much you owe, this may be difficult to do because the large number of distressed properties means that investors can find great deals elsewhere.

That is where the 'Short Sale' shows itself as a doable foreclosure stopping plan. In a short sale, once you have an investor's offer to purchase, you would submit the offer to your lender. If the lender approves, you could then walk away from the home. When the homeowner is not accepted for loan modification and is destined to lose their home, a short sale is a good way of preventing foreclosure. You'll still be required to move, but at least your debt will be cleared. The homeowner's credit score is dinged by about 100 points, versus a typical reduction of 250 points in the case of a foreclosure and subsequent sheriff's sale. If the house is foreclosed, the home owner may still owe the difference between the sale price and the amount owed to the lender.

If you are unable to effect a sale to an investor, a variation of this can be achieved involving just you and the bank. In this case, a Deed in Lieu of Foreclosure is executed and the bank will take over your home in exchange for you walking away from the home and leaving it in good condition.

Short sales and Deeds in Lieu of Foreclosure will both have a negative impact on your credit. Generally, this will last for something like two years instead of five or more years for a foreclosure.

Another foreclosure stopping method is to negotiate either a forebearance agreement or a loan modification agreement with your banker. You might be able to work something out with your lender to stay in your home though. The banks currently have a lot at stake in preventing foreclosure. Hundreds of thousands of bank owned homes are sitting vacant. They represent liabilities, not assets, to the banks.

Also, both federal and state government agencies are giving the banks incentives, and pressuring them to modify loans. If you are falling behind on your ability to pay your mortgage, contact your banker and find out what can be worked out. You may be surprised to find that banks are more receptive now than they once were.

As a homeowner interested in preventing foreclosure, you might take some small comfort knowing that you are not alone. 1 out of every 100 borrowers are experiencing trouble with their mortgage payments. Millions of people have already lost their homes. And, while some of them have been fortunate enough to have found suitable rental homes or shared accomodations with friends, many have become homeless. So clearly, preventing foreclosure should be a priority for everyone.

The high rate of foreclosures is also an important issue for our entire nation. From a social perspective, most Americans have a basic concern that people are properly housed. Beyond that, the economics of the situation demand the these problems are addressed before they become even more widespread. At last, Washington is taking serious measures to help homeowners in their attempts at preventing foreclosure.

Before it is too late, you should learn all you can about the various foreclosure stopping methods.