• To avoid losing your home, it's best to contact your lender early.Economic crisis image by Denis Ivatin from Fotolia.com
  
  If you are falling behind on your mortgage payments because you have lost your job, lost time from work because of an illness or disability, or have had to care for a sick loved one, there are steps you can take to avoid defaulting on your mortgage and facing foreclosure. According to the Mortgage Help Desk website, it's important to contact your lender right away and seek available options.
  
  

Repayment Arrangement

• According to the Loss Mitigation Training website, you may be eligible for a repayment arrangement with your lender. This involves making an additional payment on top of your normal monthly payment. If this option is available, your lender will assign you a date by which you must bring your account current.
  
  

Forbearance

• You also have the option of entering into a forbearance, which is an agreement made by your lender to not pursue legal action once you've become delinquent on your payment. However, this is only a temporary solution as you seek to move towards being able to work out a repayment plan or perhaps a loan modification. If you have an FHA loan, there are two types of forbearance agreements for which you may apply. There is a Type 1 Special Forbearance, which your lender may grant if you are unemployed. This forbearance will enable you to either stop or cut your monthly payments until you can find a job. In a Type 2 Forbearance, however, you must make a 12- to 18-month repayment plan and have the funds available to do so. The goal is to gain time to stabilize your income by making affordable payments on your account.
  
  

Loan Modification

• A loan modification permanently changes one or two of the rules of the original loan agreement. For instance, you may ask the lender to permanently lower your interest rate, resulting in lower monthly payments. Also, you can request an extension on the repayment timetable of the loan on your behalf.
  
  

Pre-foreclosure Sale

• A pre-foreclosure sale--also known as a short sale--is a situation in which a lender grants you permission to sell your property for less than you owe. You must walk away from your property but without the blemish of a foreclosure on your credit report. It will show up on your credit report as an "agreed settlement."
  
  

Deeding

• Another loss mitigation option is to voluntarily deed your property back to your lender. This is called a "deed in lieu" and is an acknowledgment that you can no longer abide by the terms of the mortgage. While you still must give up your home, you obtain relief from all the terms of the mortgage, including having to pay off the remaining balance.