With all the talk of the $700 billion dollar bailout by Congress, the $900 billion dollar bailout by the Feds, and now the government talking about taking an equity stake in major U.S. banks isn’t it time for a citizen bailout? To date everything is getting worse with all the billions of dollars being pumped into Wall Street. As the economic conditions continue to decline, the foreclosure rates continue to climb.

The many reasons that foreclosures happen are being created by the economic mess Wall Street and the global economy is going through. Unexpected unemployment, loss of a second income, divorce, excessive obligations, and the inability to pay on an adjustable interest rate that keeps increasing all contribute to the reasons for increasing amounts of foreclosures. So where is the bailout for the average homeowner?

There are ways to avoid foreclosure. If you know you are going to be late or miss a payment, notify your lender immediately. This is not a time to worry about being embarrassed or how you appear financially, this is about saving your credit and your home. Sometimes lenders will work with you on late payments and not seek legal action against you as long as you are communicating with them. In your communications you may find you can catch up missed payments over time. They call this a repayment plan and what you will be doing is adding maybe $100 to every payment going forward until it is caught up. If you have an adjustable loan, your lender could freeze the interest rate or even change it to make it more manageable for you.

The part that makes all of the above work is your communicating with your lender. If you avoid letters and phone calls, they can only assume you have no intention of catching up on back payments. They must protect their interest and will take legal action against you by filing a Notice Of Default and start foreclosing proceedings. You will be given a certain time period to bring your payments current, pay the costs of legal fees, and you can have your loan reinstated. If that is not possible in your current financial situation, you must start looking at other options.

Once a foreclosure process has started, your options become limited as far as how to stop it. At this point, if you are financially unable to make up the payments,  you want to salvage as much as you can of what’s left of your credit rating. You could consider a Deed-In-Lieu of Foreclosure. Basically you will be deeding the property back to the lender who in turn forgives the mortgage and effectively this will stop the foreclosure. Unfortunately doing this will affect your credit rating as if you went ahead with the foreclosure process.

You should also be considering a short sale. If you owe more than the house is actually worth, you may want to consider this option. Working with an Agent, you can negotiate with your lender to find out if they will work with you and what the bottom line amount they will settle for is. This is going to affect your credit rating negatively as well, but not as much as a foreclosure.

The quickest way to stop a foreclosure and save your credit rating is by selling your house quickly. The best thing to do is to contact and interview a local real estate investor. These are people that specialize in assisting families in selling their houses quickly.

No market to contend with because the real estate investors purchase the homes themselves. You can usually close a sale in as little as seven days. Selling your home quickly, paying off the mortgage, and perhaps putting a little extra cash in your pocket is the most efficient way to stop a foreclosure.

Real estate investors really are the citizen bail-out we need today. They are effective because they can act now to relieve you of your financial obligation to your lender by purchasing your home. Even though the government cannot bail out Wall Street, you can trust your local real estate investor to help you in your time of crisis.