How to Deal With Mortgage Troubles

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Having mortgage troubles? You're not alone. According to data compiled by Equifax, mortgage delinquency rates hit an all-time high in the first quarter of 2007: 2.87 percent of all mortgages were in default — surpassing even the highest levels since the 2001 recession.

If you feel you're at risk, don't despair. There are some steps you can take to minimize foreclosures and make sure your credit isn't badly dinged. Michael Eisenberg, a certified public accountant and personal finance specialist, offers this advice:

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Make your payments on time. If you're going to be late, call your lender to let them know. They may be willing to work with you if you are honest from the start.

Focus on your monthly budget. To really straighten out your mortgage situation, you need to determine your monthly expenses and income. Examine where you can cut back so that you can focus on your mortgage payments. There are a number of calculators available online that can help you get started.

Talk to the right person. When you speak with your lender, make sure you are working with the right person — someone who actually has the authority to work out a viable solution for you. Be sure to take detailed notes of every conversation and meeting you have with your lender.

Ask about alternatives to foreclosure. There may be other ways out — find out if you can get forbearance, or a request to suspend or temporarily reduce your payments. You'll need to have documented proof — such as recent pay stubs, bank statements, etc. — that you are trying your best to pay the bills.

Find out how your credit score will be impacted. If foreclosure really is the only option, ask your lender how your credit score will be affected so you know what you're getting into.

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