When homeowners first begin to experience trouble paying their mortgage, in order to avoid foreclosure, they typically turn to one of three common options. These three alternatives that can save a home include refinancing through a foreclosure or hard money lender, requesting help from the government programs, and asking the mortgage company to negotiate a loan modification.

With any plan to save a home from foreclosure, there will be both positive and negative aspects of the solution. Whether any of these options will actually help a family for the long term or just prolong the inevitable is always dependent on the unique circumstances of each financial hardship. However, homeowners can know where to focus their efforts by learning more about each solution.

Foreclosure refinancing through a traditional lender or hard money lender can be accomplished fairly quickly. If the conditions are right, a loan to stop foreclosure can be approved within a matter of days, and all of the due diligence (income verification, appraisal, and so on) can be accomplished within weeks. Hard money lenders can act even more quickly than traditional banks and foreclosure lenders.

However, it can be very difficult for the average homeowner to qualify for a foreclosure loan in the first place. This is due to strict income and equity requirements, and homes that have dramatically declined in value from peak levels may not have enough equity. In order to move ahead with the refinance, the homeowners would have to negotiate with their lender for a reduced payoff or bring cash to closing.

With all of the new government plans in place, many homeowners may attempt to cash in on the subsidies. There has been a vast amount of money made available for government-guaranteed loans to foreclosure victims, as well as programs providing assistance in working with the government to negotiate a loan modification. In some instances, these programs may be beneficial for borrowers.

Unfortunately, though, many of the government programs have been plagued by failure, high redefault rates, and wasted money. The $320 billion program to help one borrower is just the most egregious example of this. The new plans are also primarily voluntary for the banks to participate in, and the vast majority of lenders have been choosing foreclosure over assisting homeowners through the government programs.

Loan modification has also been discussed more and more by politicians, the news media, and foreclosure assistance companies, and for good reason. A mortgage modification can help lower the monthly payment, put the defaulted amount on the end of the loan, or reduce the interest rate on a loan. Homeowners who can qualify for a good modification are often in a much better position to keep paying their mortgage for the long term.

The problem, though, is that most lenders offer a much more expensive repayment plan instead of a loan modification. With a repayment plan, the interest rate remains the same and borrowers have to make their regular payment plus a portion of what they are behind. This can quickly lead straight back to foreclosure. Even through the government modification programs, many banks only approve repayment plans instead.

While these three alternatives discussed here are currently the most popular, homeowners need to be aware of the benefits and drawbacks of all of the solutions to foreclosure. In most cases, losing the home can be avoided if the borrowers know where to focus their efforts, rather than wasting time on popular, but inappropriate ways to stop foreclosure. Foreclosure is a matter where time is of the essence -- there is no good reason to waste it pursuing bad alternatives.