Foreclosure is a complicated and serious issue that varies from state to state, with many legal, tax, and credit history implications.  You need to find real estate, tax, and legal professionals in your local area who are knowledgeable about the process, and who you can meet with face-to-face for guidance on how to solve this problem.

Are you in the foreclosure process and not sure how long you have - read my blog article on the Foreclosure Timeline in Wisconsin (http://activerain.com/blogsview/252371/Foreclosure-Timeline-How-long).

If you are falling into trouble with your mortgage obligations, here are some options to begin to consider and discuss with your local professionals to try to solve your mortgage problems and avoid foreclosure...

1. Reinstatement

Reinstatement means you get caught-up on the amount you currently owe.  This includes paying the monthly payments you have fallen behind on, plus any late fees or penalties charged by your lender.  This is an option that is available before the property goes through the sheriff's sale/auction and goes "back to the bank".  You should contact your lender to find out what the current reinstatement amount is for your loan.  To come up with the additional money, you may need to sell off some other assets if you have them available (i.e. boat, car, retirement account) or borrow the amount from a trusted source, such as a member of your family.

2. Redemption

Redemption is when you pay off your mortgage in full following the sheriff's sale and reclaim the house.  The redemption period in which you are able to reclaim the house varies by state and the circumstances of the situation (such as if the property is farmland or if it is vacant.)  Redemption typically occurs by selling or refinancing the property.  But since the home has already been foreclosed on and your credit history has been affected, refinancing will be difficult if not impossible.  You may be able to turn to a trusted a family member or real estate investor who can purchase and take title to the property, while you continue to make the payments and live there.

3. Forbearance Agreement

Also known as a work-out program or a payment plan, a forbearance agreement may be able to be negotiated with the lender.  Instead of paying the full amount of the monthly mortgage payment, you may be able to pay a lower amount for a limited time.  This is only an option before the sheriff's sale occurs. The lender will want to know what went wrong and why you fell behind on your mortgage payments, and will want to be reassured that the problem has been solved and you can get back on your feet.  They may be willing to lower your payment for a limited time, but will not want this to be a permanent solution.

4. Bankruptcy

This may or may not be an option for you.  You will have to contact a bankruptcy attorney to find out if this will be a solution for you.

5. Deed In Lieu of Foreclosure

This process is basically when you just give the property to the lender to satisfy the mortgage debt.  The advantage for you is avoiding the foreclosure from ruining your credit history, and releases you from any personal indebtedness associated with the defaulted loan.  The downside is banks may be reluctant to agree to this because the last thing they want is another property that they now need to sell, especially one that doesn't have any equity in it.  There can be a long application process with this as well.

6. Do Nothing

This isn't really a solution, but it is a choice you have.  Unfortunately, this is the choice many people facing foreclosure make, and is the worst option available.  Foreclosure can be an personal emotional upheaval, and many facing foreclosure are in denial of the cold hard consequences.  If you are in this situation, you must work with your lender and your local real estate, tax, and legal professionals to salvage what you can before things get worse.  Doing nothing is not a solution, and is not an option.

7. Short Sale

A short sale is when you sell the home for less than you owe on it.  Now this leaves you with the question of what happens to the difference between what is owed and what you sell it for?  You owe $200,000 on the home, but you can only sell it for $180,000, what happens to the $20,000 that you still owe your lender?  There are two options - first, they could go to the courts and file a judgment against you for the amount owed in an attempt to collect the balance from you.  Or, they could simply write off the amount owed as a business loss and forgive you of the debt.  If this is the case, that amount you were forgiven may be considered to be income, and you may be taxed on that amount.  The government has been considering changes to the tax code to fix this, so watch for these changes to be announced, or contact your lawmaker to request that this be changed.

Please feel free to question or comment with your own ideas and suggestions.

If you are facing foreclosure, the worst thing you can do is wait and hope things will get better.  You need to take action right away and contact professionals who can help you out of this situation.  Visit my website www.MyNextNewHome.com for more information on my real estate services, and feel free to call or email me for more information, I'm here to help.