There are a few basic necessities in life that we simply cannot do without.  We need to have food, clothing and shelter in order to meet these basic necessities.  Although the food and clothing are not really something that many of us consider to be a large outlay of money, our shelter often is.  Because we are dealing with an economic downturn of an unprecedented level, many people have been facing mortgage foreclosure or the threat of mortgage foreclosure as a result of not being able to pay their home loan on a regular basis.

There’s no doubt that mortgage foreclosure has been going up on a regular basis and in some parts of the country, it is almost at epidemic levels.  Just because people are losing their homes, however, does not necessarily mean that you need to lose yours.  As a matter of fact, there are several things that you should do if you feel that you are facing mortgage foreclosure and if you fall behind on this important loan.  Don’t delay or hide from doing these things, they must be taken care of promptly.

The first thing that you need to do whenever you begin falling behind on your home loan is to contact your mortgage company immediately.  Let them know that you are having a difficult time making your loan and explain exactly why you are having a difficult time doing it.  Often, these mortgage companies will work with you to a certain extent because they are not interested in having you go into mortgage foreclosure anymore than you are interested in it.  After all, they are not in the real estate business, they are in the business of lending money.  If they take your home from you, it is simply going to be another empty home that they own which they are not collecting payments on at the time.

Another thing that you can do is to make a payment of any size instead of simply not making any payments at all.  Often, the loan company will accept the smaller payments and will continue to cash the check instead of putting you into mortgage foreclosure.  If you have reached the point where you’re receiving threatening letters about mortgage foreclosure, however, make sure that you seek legal counsel to see if you have any recourse that is available for you in your particular case.

The idea is under consideration as part of the Treasury Department’s continued effort to limit foreclosures, which has been at the core of the financial crisis. The plan would seek to revitalize the financial market without bailing out homeowners and lenders, the Journal reported Wednesday.

The reports circulating suggest that the Federal government is going to subsidize morgage companies so the average morgage rate is only 4.5%.  Currently that is nearly 1 full percenage point lower.  4.5% would also be near the lowest ever available to Americans! 

You should prepare now if you are in a position to purchase a new home.  Once enacted the real estate activity is going to spike and it will be uncertain how long these subsidized loans will be available.  One step is to check out a mortgage calculator to see how much house you could afford if the rates fall to 4.5%.