Though most homeowners don't ever think it will happen to them, foreclosure is a nationwide problem. The national foreclosure rate is at the highest level since The Great Depression. If you are having difficulty paying your mortgage, it is imperative that you take action-there may be a way out:

Contact Your Lender

It is estimated that nearly half of the people who face foreclosure lose their home simply because they do not communicate with their lender. If you are behind on your mortgage payments, the first thing you will want to do is contact your lender and discuss the problem. Sticking you head in the sand will only make the situation worse.

'If people call early, it is more likely that a solution can be found so that they can stay in their home,' says Sharon Sayles Belton of the Homeownership Preservation Foundation. 'Help is available if people will take action to address the problem.'

Most lenders have specific procedures or entire teams in place to help clients who can't make their mortgage payments. In some cases, you may be eligible for a forbearance, which will allow you to postpone the interest and/or the payments for a period of time.

Loan Modification

If you are unable to keep up with your mortgage payments, you need to determine whether it is a short term problem or a long term problem. For example, job loss could be temporary. In this situation, you could ask your lender to accept interest only payments. This will reduce the amount you are required to pay for a temporary period of time; you can always catch up on the payments later on.

If, on the other hand, you can't make your payments because your interest rate adjusted and the home is no longer affordable, you have a long term problem on your hand. In this case, you need to get a new mortgage before your credit ends up in the gutter. Talk to your lender immediately about refinancing possibilities that will help lower your rate, and in turn, your monthly payments.

Reinstatement

If you have a lump sum of money coming your way sometime soon, you may be a candidate for reinstatement. In this case, the lender will allow you to skip payments, providing you are able to catch up by paying a lump sum of money by a specific date.

Sell, Sell, Sell!

Many people who are facing foreclosure as of late have tried and failed to sell their home when it needs to be sold. The home sale market is extremely slow right now. With all the unsold inventory, you are sure to face a fair amount of competition in the market, making it difficult to sell quickly and still get the amount needed to cover the mortgage loan.

If you are considering the idea of selling to get out of your mortgage payment, you had better study your local market. Know what is selling, what it is selling for, and how long it is taking to sell-you will be much less likely to set a goal that is unattainable.

You will also want to speak with your lender about this option. You may be approved for what is called a 'quick sale', which means you can sell the home for less than what is owed on the loan, and still consider your mortgage paid in full.

Hand Over the Keys

Handing over the keys to your lender is always an option; however, you need to keep in mind that you will still be responsible for paying off the mortgage unless the lender is able to recoup all of the money that is owed to them. The chances of the lender selling the home in a timely manner, and getting enough money to cover the loan are very slim, and hardly worth the gamble.

You will also be left with a 'scarlet letter' of sorts on your credit report that tells everyone who looks that you had a home repossessed. This can make it very difficult to obtain a mortgage, and possibly other types of credit, later on.

Special Situations

If you have an FHA loan or a VA loan, you may be able to dip into a special insurance fund to help catch up on the mortgage. Usually, your loan must be at least 4 months past due, but no more than 12 months behind. To get the money you need, you will be required to sign a promissory note, promising to pay the money back when you sell or pay off the loan. The good news is that the money you borrow is interest free.

Don't Assume There is an Easy Way Out

With foreclosures on the rise, more scam artists have begun to surface. If you see an advertisement or are contacted by someone claiming to have the solution to your problem, you should be very wary. Many of these claims are mere scams meant to take advantage of people who are in a desperate situation.

However, this doesn't mean that you can't seek advice from outside sources and various agencies. Such agencies may not have money to give you, but they may be able to help you work with your lender to come up with a solution.

'What we recommend,' says Sharon Sayles Belton of the Homeownership Preservation Foundation, 'Is that people call HUD certified credit counseling agencies, where you know you will be talking to someone who knows what they are talking about.'

Who to Call for Help

Again, the first person to call is your lender. There may be options available to you that you are not aware of. Other places to call include:

• Homeownership Preservation Foundation: 1-888-995-HOPE
• HUD Approved Counseling Agencies: 1-800-569-4287
• For FHA Loans: 1-800-877-8339
• For VA Loans: 1-800-827-1000
• For Victims of Predatory Lending: 1-800-348-3931