Many homeowners would be able to afford their mortgages if not for a temporary financial hardship or an inopportune interest rate reset. They are not facing a serious long term change in their income, but were only temporarily unable to make a payment. Interest rate resets on adjustable rate mortgages may be even more unfortunate, as it is clear so many borrowers did not understand and were not made aware of the fact that the cost of the mortgage would drastically increase a few years after they bought their home.

For families in this situation, it would seem easy enough to identify the goal that would allow them to keep their home; namely, they must lower their monthly mortgage payment. Of course, this is much easier said than done, but there are a number of routes that borrowers can take to try and obtain a more affordable payment, even if they have bad credit or they have recently changed jobs. While using a foreclosure lender is a viable option, in times of a credit crunch and lower property values, it may be wise to consider other solutions first.

Before they try anything else, all homeowners should call their lender and ask the loss mitigation department what is needed to qualify for a mortgage modification. Borrowers will probably have to send in a number of financial documents and fill out bank forms proving they can make a reasonable payment every month. This solution may significantly lower the payments but will typically not lower the total amount owed on the loan, as a modification is usually just about reducing the interest rate in order to make the monthly cost more affordable.

Borrowers may also want to consider the use of a foreclosure help company to do the services listed above. If they do not have the time to spend on hold with the bank for hours a day, then they might want to unload this part of the process to professionals. The owners can do pretty much everything else to qualify for a workout solution on their own, but banks currently have so many foreclosure cases that they need to be called almost everyday until the homeowners are given an answer to their application. If the borrowers can not make that call everyday, the should seriously consider paying someone else to do it on their behalf.

Another, more speculative, option is for homeowners to default on their loan completely and hope that the bank sells their mortgage to the government. The government will probably step in and negotiate the balance down and reduce the borrowers' monthly payment before selling the loan back to some other bank to collect the payments. Wall Street banks are being bailed out for hundreds of billions of dollars of foreclosure victims' money -- homeowners behind in payments might as well get in line to get a piece of their own money to save their homes.

Finally, as one last option to lower monthly payments dramatically, homeowners can try to fight the foreclosure in court for as long as they can get away with. It may take years for the legal process to be over, if borrowers answer the initial complaint and demand that the bank show proof that it can foreclose on the house and has been in compliance with all the applicable laws. There are so many regulations that banks will have violated some clause in a state or federal law, or lost the original mortgage note. In any case, some homeowners have lived mortgage free for nearly a decade while they file motions in court, wait for hearings, and file appeals at every step of the process. Even if they lose the house in the end, they will have a long period of time in which to save money and pay down other debt.

Families who experience a temporary setback in their income may find it almost impossible to get back on top of their mortgage payments, with little help offered from the mortgage company itself. The banks make it difficult to do so, as they begin accelerating fees and interest in an attempt to eat up as much equity from a house as possible, if it goes to a foreclosure sheriff sale. But homeowners do have options to lower their payment, either through modification of the loan, a potential government bailout, or fighting the lender in court, not to mention refinancing with a specialized foreclosure lender.