When you miss your mortgage payments, foreclosure may occur. This is the legal means that your mortgage company can use to repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, your mortgage company or HUD could seek a deficiency judgment. If that happens, you not only lose your home, you also would owe your mortgage company or HUD an additional debt.

Most lenders idea of helping you avoid foreclosure is by putting you in a payment agreement or forbearance agreement. They will ask you to make payments which are generally about 150% more than your normal payment (that's 1.5X) for a period of time ranging from 3 months to 3 years depending on how much you owe. You may be better off refinancing your home loan to a lower payment, and using the excess cash flow to rebuild your credit with the goal of refinancing into a lower paymnt loan after 2 to 3 years.

A last resort to avoid a foreclosure is to file for bankruptcy protection. The bankruptcy laws have toughened a bit regarding the ability to file. It is recommended to speak to your attorney regarding this option and should be considered only as a last resort to avoid losing your home.

To avoid foreclosure or the beginning of the foreclosure process on your home, you may want to look into selling your property. This should be considered if you are not able to make the payments on your home and the mortgage payments seem to steep for you. It would be a shame to lose all of the equity you have in a home and let the bank take that by having your home foreclosed upon.

The best way to avoid foreclosure is to not purchase to much of a house for your budget. There are exspenses that are not figured into the loan application such as groceries, telephone and cable bills. You should sit down with your mortgage broker before you start looking at properties and determine a comfortable payment every month. Based off this payment your mortgage broker should be able to give you a purchase price range to look at.

Some lenders will help you to avoid foreclosure. The lenders are not in the business to foreclose on your home, and more often than not, they do not want to foreclose. The lender may allow you to add multiple months' worth of missed payments, interest, and late fees onto the loan balance. Then you are responsible for paying off the arrearages by making small additional monthly payments, on top of what your regular payment should be.