Learning that your home might be foreclosed on can be extremely unsettling. One might understandably begin to think that there is nothing that anyone can do in the way of preventing foreclosure.

Preventing foreclosure is, however, manageable by applying just a few foreclosure stopping methods. There are a few very important steps that a homeowner in a messy financial situation needs to consider in order to save their home from an unwanted foreclosure.

The first foreclosure stopping method to consider is to seek out an investor who is willing to buy your home for more than you currently owe on it. This way, you clear the balance of the loan with no additional impact on your credit. Depending on how much you owe, this could be unrealistic to do because the large number of distressed properties means that investors are enjoying a buyer's market.

That is where the 'Short Sale' presents itself as a viable 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 loss mitigation and is going to lose their home, a short sale is a good technique of preventing foreclosure. You'll still be required to move, but at least your debt will be cleared. Your credit score is dropped by about 100 points, compared to a typical drop 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, something similar can be done between just you and the mortgage lender. In this case, a Deed in Lieu of Foreclosure is issued and the bank will take possession of 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 effect on your credit. Generally, this will last for about 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 the lender to stay in your home though. The lenders 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 lenders.

Also, both federal and state government agencies are providing the banks incentives, and pressuring them to modify loans. If you are struggling to make your house payment each month, contact your lender and see what can be worked out. You will find that banks are more flexible now than they once were.

As a homeowner interested in preventing foreclosure, be assured that you are not alone. 1 out of every 100 borrowers are having 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. And from an economic viewpoint, the current banking and housing crises are affecting people from all walks of life. 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.