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Tips for salvaging your foreclosure

As more Americans and Washington, D.C., residents deal with the foreclosure fallout that has accompanied the recent economic recession, some people are finding small keys to success in an otherwise failing market. Many people who could have fallen victim to a foreclosure situation have avoided such problems by exercising their financial savvy. Today, we are going to share some of the secrets to avoiding mortgage crises even during tough financial times.

First, people whose homes might be in jeopardy should remember that even a significant amount of savings cannot always protect you from financial problems. One Baltimore woman whose house went into foreclosure said she was unable to make her mortgage payments, not because of bad budgeting, but because of an expensive medical emergency.

Even the $20,000 she had in the bank could not provide an adequate buffer during the recent tough economic times. As a result, this fiscally responsible woman found herself floundering with late mortgage payments.

After the initial difficulty hit, the woman decided to be pragmatic about her situation. She contacted her mortgage company almost immediately after financial tragedy hit, a decision that minimized her losses. People who may be facing foreclosure should act quickly to find a solution. A speedy response can make the difference in your ability to sell the home or suffer a foreclosure.

People who are afraid of losing their homes should also attempt to remove any emotional attachment they might have to the house itself. Sentiment can often prevent homeowners from truly understanding the difficulty of their financial situation. They refuse to sell the property because of emotional attachment, a decision that can ultimately cause even more problems. Keep an open mind about moving, and you are more likely to rescue the equity in your house.

More than anything, people who are undergoing foreclosure are encouraged to have an open mind. Consider living in a more affordable district. Do not rule out the option of a short sale or other financial alternative. The more flexible you are with your lender, the more the bank will be able to help you rebuild your financial life.

Source: BET, "American Money: Life after foreclosure," Dedrick Muhammed, Feb. 26, 2013

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