If your mortgage payments are overwhelming you, there's still hope - if you act quickly. Housing advocates recommend calling the lender to ask for a "workout plan" that spreads your past-due balance over multiple payments, lowers your monthly bill for a set period or otherwise changes your terms to help you get past a bad patch.
Lenders and mortgage servicers have more incentive than usual to work with borrowers, housing officials say, because they're dealing with rising defaults at a time when new homeowners don't have much equity. Banks don't want to be stuck with lots of real estate, let alone homes they'll take a loss on.
"Some lenders will go to great extremes to keep borrowers in the homes and to avoid the cost of foreclosure," said Laurie Anne Maggiano, acting director of the U.S. Department of Housing and Urban Development's office of single-family asset management.
A housing counselor can also help by advising on your finances and acting as a go-between with the lender. You can get immediate help by calling 311 if you live in Baltimore City, or 888-995-HOPE if you live elsewhere. Also, HUD keeps a list of recommended counseling agencies on its avoiding-foreclosure Web page: www.hud.gov/foreclosure/index.cfm.
An attorney, meanwhile, can advise you about options ranging from bankruptcy to court action. The nonprofit Civil Justice Inc. in Baltimore (410-706-0174) refers callers to reasonably priced lawyers.
If you're stuck in a bad loan, you can try refinancing into something better. You might qualify for the state's "Lifeline" refinancing program: www.morehouse4less.com/LifeLineRefi.aspx.
But if the home is beyond saving, that doesn't mean foreclosure is inevitable. Sell first, and you preserve your credit rating - plus any profit.
If the offers come in below what you owe, you could ask your lender to approve a "short sale," in which it accepts the lower price and forgives the difference. But seek financial advice: You might have to pay taxes on the forgiven amount.
"A very large percentage of borrowers simply don't know they have options, and so they don't do anything," said Brad German, a spokesman for mortgage financier Freddie Mac. "And doing nothing is about the worst thing you can do, with one caveat - and that caveat is 'panic.'"
In other words, be wary of throwing money - or your deed - at people promising help. Foreclosure fraudsters might try to milk you for fees or even trick you out of your home, said Joseph E. Rooney, deputy commissioner for financial regulation at the state Department of Labor, Licensing and Regulation.