In Dutchess County New York, I was shocked to learn that weekly there are about 125 foreclosures; yes, many are losing the roof over their heads.

This post is not intended to dwell on the negative stuff in the market but hopefully it will help some to get out of a state of denial and be proactive about avoiding foreclosure.

Here are some reasons why people find themselves on the brink.

• Adjustable rate mortgages which are now resetting to higher rates.  In most cases the borrower was not really qualified for the loan in the first place.
• Higher property taxes.  With the rise in property values over the last few years, the municipalities carried out revaluation and consequently more people are facing higher taxes.
• Financial devastation from high medical bills
• Divorce
• Loss of job
• Cashing out home equity - that, as a result of lower home values, puts them in a negative equity position. 

Here are some terms you should be familiar with:

• Short Sale - This is when a lender will allow the property to be sold for less than the mortgaged amount; for example the mortgage amount was 350,000 and the bank accepted 250,000.
• Debt Forgiveness - This relates to the difference between the mortgage and the sale price.  Using the example above that would be $100,000.  The mortgage company could give you a clean slate, or  you could still be liable for the balance.  There are also tax implications.
• Summons of Complaint - Letter to borrower stating default status
• Judgement - Claim against the property, for example for unpaid taxes.
• Les pendens - pending litigation, possible foreclosure.  If you try to buy such a property you could not get a clear title before the outstanding claim was satisfied.
• Loss Mitigation - The loss mitigation department deals with foreclosures and tries to get as much money as possible (mitigate the loss) for the lender. This is the department you would talk to if you are behind on your payments.

This is a very stressful situation and can take a toll on a family.  I know this doesn't offer much comfort but many in other counties and across the country are facing similar situations.  This is not just happening to people owning a house for $100,000 but even those with homes costing over $1,000,000.  Now that the damage has been done it has to be faced.  Finding an alternative to a bankruptcy or foreclosure is a much better way to get out of a bad situation.

As a real estate agent, I love helping people find the home of their dreams but at the same time, if you have had a setback I am also here to lend a helping hand by directing you to professionals who have helped countless consumers avoid bankruptcy or foreclosure.  The key to navigating this crisis is finding the people skilled in this area

The best thing you could do for yourself and family is to talk to someone.  In a future post, I will be featuring one such local company that has been instrumental in helping many to avoid a foreclosure.