Foreclosure No Longer a Taboo Topic.(Credit Counselor)

Byline: Amilda Dymi

Foreclosure used to be the kind of unpopular situation people would rather not talk about. Times have changed. Bad news pouring in from every state and on a daily basis demands an extra effort to ensure parties involved in a foreclosure process know exactly what it means and how to deal with it. Homeowners usually do not know how to protect themselves and avoid losing their home. Therefore most lenders, servicers, brokers and nonprofits are now facing the challenge of educating borrowers.

The American Bankers Association, Washington, recently suggested counselors must be more aggressive in helping borrowers take action if they fear foreclosure.

"No one wants a foreclosure," said Diane Casey-Landry, ABA chief operating officer, stressing what lenders know but some homeowners are still skeptical about. "Consumers need to know there is help out there if they ask for it. Banks will work with borrowers to keep them in their home and maintain a long-term relationship."

The first step, ABA said, is to inform that "there is help and hope for those who ask." The No. 1 tip is to maintain an open and honest dialogue with bankers. Survey after survey has shown that one major problem with homeowners is that they do not contact the lender early enough, which is right away once they fear they might not be able to make a mortgage payment.

ABA offers several tips that can help homeowners avoid foreclosure. And it starts with assessing one's financial situation honestly. Homeowners need to calculate all financial obligations and measure exactly how much of the monthly mortgage obligation they would be able to pay in the upcoming months.

A well-prepared and knowledgeable borrower makes it easier for the lender to come up with a work out plan. Especially if homeowners have called the lender before they miss a payment. Counselors need to make sure these homeowners know ...