Homeowners who are facing foreclosure can stop the foreclosure process if they start early enough, educate themselves as to their options and seek the proper professional help and advice. Here are 10 ways to stop your home from going to foreclosure now:

1. Contact your lender or loan service provider (see our Mortgage Company Directory) as soon as you know you are going to have trouble making your monthly mortgage payment. Communication is the key to stopping the process. Keep copies of all written documentation and notes regarding conversations that you have with your lender or loan service provider.

2. Consult with a professional such as a foreclosure defense real estate attorney, mortgage broker, lender, loss mitigation company or free housing counselor to find out the best options for your financial situation.

Get a referral for an attorney or contact your local state bar. There are numerous non-profit organizations that do not charge a fee for assisting you. Look for one that is certified by HUD (the Housing and Urban Development Department). You can Google one in your area.

Watch out for scam artists and others who are preying on the misfortune of homeowners, and avoid anyone who asks for fees upfront except an attorney, who is legally authorized to charge a retainer. Do not sign any legal documents transferring ownership of your property without an attorney’s advice unless you have made a decision to voluntarily sell your home.

3. Refinance your existing mortgage. With the new Obama foreclosure prevention plan allowing homeowners to refinance their primary residences with as little as 5% equity in their home, more homeowners will qualify to refinance now and be able to get lower monthly mortgage payments avoiding foreclosure. Only loans backed by Fannie Mae and Freddie Mac are eligible and the loan must be a conforming loan $417,000 or under. Prior to the new plan, homeowners needed at least 20% equity. You must be current on our loan though. The plan does not pertain to investment properties or jumbo loans over the $417,000 limit.

4. Loan Modification. Ask your lender if you qualify for a loan modification is you do not qualify for a refinance. A loan modification is different from refinancing as it is a modification of your existing loan and a not a new loan. Either the terms are extended, sometime debt is forgiven or the defaulted amount is applied to the back end of the loan. Again you must show income that you can pay the new mortgage so if you are not working or show sufficient income, you will not qualify for a mortgage modification or a refinance.

5. Deed in Lieu of Foreclosure. A deed in lieu of foreclosure is simply where you sign a deed back to the lender and hand them the keys to the house walking away without having to pay off your mortgage.

6. Sell Your Home. If you do have equity, you may want to sell your home and downscale to something that is more affordable or just rent for awhile until your financial situation improves. If you have lost your job or your hours have been cut, you are facing a divorce, illness or death in the family, selling your home may be the best option. Consult a Realtor and have them market your home and help you find the right buyer.

In today’s market, you must price your home at market or slightly under to sell it because there is so much competition from other distressed properties, such as short sales and bank owned foreclosures (REO’s).

7. Short Sale. A short sale is when you ask the lender to take a reduced amount on your mortgage and approve the sale at a lesser amount than you owe on the mortgage to a buyer who is willing to purchase the home. The shore sale process can take anywhere from 30 days to 60 days or longer. You will want to have a Realtor list your property and help you find the right buyer. However, an attorney, title company or short sale company should negotiate the short sale with your lender. The risk is that the bank will now approve the sale and your home could go to foreclosure if you do not make your mortgage payments while you are waiting for approval.

8. Loan Rescission. If you suspect that you are a victim of predatory loan practices, you may want to seek the advice of a foresensic loan specialist to review your loan. Most real estate foreclosure defense attorneys can perform this review for you and let you know if you have legal grounds to rescrind your loan. You have three years from the time you discover the predatory loan practices in which to file a legal action to rescind the loan.

9. Reinstatement. Any time during a foreclosure process, the homeowner can pay the defaulted amount including any fees and costs and the loan can be reinstated.

10. As a last resort you may need to file bankruptcy. Certain states protect primary residences and other personal assets from bankruptcy and you may be able to keep your home and your car and pension plan. However, you will need to consult with a bankruptcy attorney as the bankruptcy laws are complicated.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.