We watch the news.  We see the grim statistics.  We see the pictures–rows and rows of homes and every other one has a “for sale” sign in the front yard.  We hear our friends and neighbors talk about struggling with their home payments or telling tales of acquaintances who are trying to avoid foreclosure.  We hear the politicians explaining that there is a foreclosure crisis and that more people are on the fast track to losing their homes.

It’s not a positive environment.  It’s not the kind of situation that inspires a great  deal of confidence when one is struggling to make ends meet and to avoid foreclosure.  It can make you feel like you’re just caught up in a gruesome part of a giant cruel world and that you’re doomed to lose your property.

That sense of helplessness leads many people to do very little other than to let those notices from the bank pile up and to wait for the inevitable, praying for its delay.  When the reality of an imminent foreclosure emerges, they make an effort to find something–anything–to save the day.  That rarely works.

If you want to avoid foreclosure, you need to start with the right mindset.

Ostriches Don’t Own Homes. If you stick your head in the sand until the sheriff comes knocking on your door, you’re going to lose your house.  You can only avoid foreclosure by being aware, involved and proactive.  Don’t willfully ignore the situation or the correspondence that shows up as its consequence.  And don’t put your faith in luck.  Be involved and be aggressive in resolving the matter.

The tough situation we’ve noted could be a lot less grim if those in a tough situation would always become more active and involved, as Cold French Fries notes, “As the number of Americans facing foreclosure of their homes, many could be saved if only they understood the process more.”

The Bank Can Be Your Friend. When people are dealing with foreclosure situations, they often see it as a fight against the bank for their home.  In a sense, that’s true.  However, the bank only becomes your opponent when it becomes clear that the two of you can’t really work together in a meaningful way.

Your lender does not want your home.  It really doesn’t.  It’s in the banking business, not the real estate business and with the property market where it is right now, they aren’t excited about increasing their residential property portfolio.

Your bank wants you to pay.  You may not be able to do that in the way originally planned, but that doesn’t mean you shouldn’t try to work with your lender.  As Freddie Mac points out:

If you are having difficulty paying your mortgage … call your lender! It’s important to act now before you get so far behind in your payments you end up facing foreclosure.

There are options available that may allow you to save your home. But the longer you wait the fewer options are available. Remember, your biggest ally if you encounter difficulty paying your mortgage on time is often your lender.

Your lender – also called the servicer – has a variety of options to help you stay in or sell your home. These options include:

* The President’s Making Home Affordable Plan
* Refinance
* Forbearance
* Repayment plans
* Loan modifications

Don’t Believe in Magic. If you start searching for foreclosure avoidance advice online, you’ll find tons of “counselors,” ” representatives,” “advocates” and other organizations who claim to have the remarkable ability to stop foreclosures dead in their tracks, in the blink of an eye.

Take those claims with more than a few grains of salt.  While there are undoubtedly some very helpful people in this market space, there are also many scam offers ran by those who are simply interested in turning a buck based on the desperation of their target demographic.  They realize that desperation creates bad decision making and they hope to fill their coffers because of it.

If you can’t make things work with your bank and the options that might be available there and you feel like it’s time to seek some outside assistance, the Federal Reserve Board recommends working with HUD-approved counselors.  It also notes:

If you feel you may be the target or victim of foreclosure fraud, trust your instincts and seek help. For tips on spotting scam artists, visit the Federal Trade Commission’s webpage on foreclosure rescue scams. Report suspicious schemes to your state and local consumer protection agencies, which you can find on the Federal Citizen Information Center’s Consumer Action Website.

Things may not have gone the way you originally planned them to go.  Times may be tough.  That doesn’t mean you should just give up and watch the economy beat up on you.  Those who start with the right mindset can often avoid foreclosure.