Tips to beat foreclosure

You're struggling to keep up on house payments. Hey, it happens to the best of us, as evidenced by the foreclosure wave that's crashed across the country, leaving mass destruction in its wake.

Pointing fingers and assigning blame only delays the inevitable need to find a desperate solution. Yeah, maybe the banks tricked unwitting people into signing mortgages with poor future caveats, people signed mortgages that they didn't fully research and understand ... and none of us could have predicted that the real estate market would collapse and homes would become a fraction of their worth, etc., etc., etc. (Wow, I'm starting to sound like Yul Brynner a la The King and I.) But the cold, hard fact of the matter is that foreclosures have become a reality -- one we need to deal with as a palpable occurrence that could happen to any of us for a myriad of reasons.

Picture it: You're struggling to pay your Comcast bill, much less your home loan, when you begin to get menacing calls from your bank. Though you still haven't spoken to anyone from said bank yet -- you screen every call and let your trusty voicemail deal with the bad news -- you know they're looking for you. Visions of high-speed car chases of you fleeing from black Lincoln Towncars filled with angry bankers start keeping you up at night. Everytime you leave your house, you cautiously tip-toe out your front door, like a deer in headlights, and timidly peek around before darting to your car for cover to evade any briefcase-wielding men in suits. The hunt is on.

But you can only feign ignorance for so long, and playing the cat and mouse game is just a sandbag protecting you from the inevitable storm. So, what's a homeowner to do? (Besides jump in your car, drive south of the border and set up shop in Oaxaca ... although I hear their outdoor fiestas are fabulous!)

First off, prioritize your bills by making a list with the most important ones up top. Obviously your home loan is numero uno. Your superfluous bills should reside near the bottom of the list, and these you should probably cancel. You know, the ones you don't really need, i.e., your cable bill (sorry, you'll have to watch Grey's Anatomy at a friend's), your landline and/or cell bill (pick one, Grasshopper, and downgrade to the cheapest contract!) and your Netflix subscription (pssst, you can rent movies and TV shows for free at your local library).

Your credit card bill should fall after your home loan. Again, your mortgage should come first, before any other debt in your life. Many times, real estate is the only worthy investment of any real value that people have to their name, and losing it is not only a painful process, it creates a horrible blemish on your credit record. Yes, missing a credit card payment or two is also bad, but if you want to begin rating differing levels of "bad," it's far worse to have your home foreclosed. Ask yourself what's more important: Making sure your couch is paid off on your Macy's card, or making sure you (and your family) have a roof over your head. You do the math.

Once you're able to make payments again on your mortgage (hopefully without a struggle), resume paying other bills on your list from the top down. Don't worry, you'll get your Netflix subscription back, it just might take some time. This approach assures that you aren't spreading your money thin over a broad range of bills, nonessential or otherwise, and forces you to prioritize your payments.

If that's not enough, set up shop and sell your goods! Those crystal wine glasses may be beautiful, but what will you be drinking out of them if you've been kicked to the curb? Sell them. In fact, sell everything you can. Furniture, your DVD and music collection, collectibles, electronics ... anything that you know is worth value. It might get to the point of where you're sleeping in sleeping bags on the living room floor, and using milk crates as a dinner table, but that's okay. Yes, this will only sustain you for a few months, but that's time you can use to save more money. When times get desperate, you need to start thinking on a monthly basis. Ebay, Craigslist and Amazon are great places to peddle your wares.

And if that's not enough, you might have to venture out in search of additional work. I know, it's very, very hard to be on your feet for more than eight hours a day (hey, I worked retail in college!) or to sit at some desk, but this would only be a temporary thing to help save your house. Any monetary cushioning helps. It's understandably excruciating to spend six to seven days a week away from your family and only see them late at night when you come home exhausted, but doing this doesn't just show marvelous strength and character, it reaffirms your determination to overcome any obstacle thrown your way. Bravo!

You could also try refinancing your mortgage, which doesn't always work since it's done on a very individualized basis, especially in today's market. Another option, much like credit cards, is that mortgage interest rates can be negotiated. Think of it this way: When a bank forecloses your home, it ends costing them because they have to turn around and sell the house at a discount, along with lawyer fees. Bottom line: You won't know until you ask, so go ahead. Call your lender and ask if they can tweak your interest rate, even a tad.

Another option, since you already have your lender on the phone and all, is to ask about conducting a short sale, where your lender accepts less for the home than what your original loan amount is for. Although this seems like the most popular option these days, short sales don't apply to everyone and are only done on a case by case basis. For example, not all properties and sellers qualify for short sales, lenders may think they'll lose money on a short sale versus a straight-out foreclosure, etc.

Then again, the whole point is to hold on to your home and not lose it right? Yes, you could accept being foreclosed and go back to renting, but doing so would ding your credit horribly and financially hurt you for many years to come. Unfortunately you're in a pickle, but you can pull yourself out. Don't go down without a fight!