Almost daily, you hear news reports about the increasing numbers of homes in foreclosure. What you don’t hear reported is how increasing energy costs are so often the cause of this devastating problem.

Are you losing your home because your can’t afford to pay your energy bills and your mortgage? If you aren’t facing foreclosure can you afford temperature settings that keep you feeling comfortable inside your home?

During the recent U.S. housing boom, builders completed homes quickly. Interest rates were low and investors eager to cash in on high returns on investments. Unless you were knowledgeable about energy-efficient home features and made sure they were included during construction, chances are your new home wastes a lot of energy. It’s also likely you don’t feel comfortable in your home due to uneven room temperatures, drafts, cold floors, etc.

There was a time when home air conditioning was a luxury. Now it seems more like a necessity. Average temperatures in North America have risen over the last 20 years, remaining high for longer periods and forcing people to turn on air conditioners powered by electricity to survive excessive exposure to heat.

Rate caps that once held down electricity costs are ending countrywide. Maryland residents recently experienced the shock of a 70% electric rate increase. Pennsylvania residents will receive the first of several rate increases starting in 2008.

The mortgage industry facing huge losses from foreclosures is working with homeowners to reduce monthly mortgage costs. A reduction in mortgage costs may help, but this is only a temporary solution. Moving to another home, unless it is energy efficient will not solve the problem.

The best solution is to implement energy saving features in your home as quickly as possible. This will not only be good for you financially, it will also be good for the planet.

©Siti Crook, 2007

Foreclosures are often a good bargain up front, since these homes are often priced below market value. Even before you start negotiating asking price, the average foreclosed property saves you money because the lender wants to sell the repossessed house quickly to recoup the money lost through a defaulted loan. This means great news for you. You stand to save thousands or tens of thousands of dollars on the property you want to buy. However, there are things you can do to lower the price of that foreclosed property even more.

Research is most important factor if you want to save money on a foreclosure. If you want to save money on a foreclosed house, arming yourself with knowledge is essential. When you consider a repossessed home, take a look at the neighborhood, at the repair costs you may need to pay on the property, and at other factors. Do your own assessment of the property. Use this information to negotiate a better price on the property.

One way to save more on a foreclosed home is to seek out homes that other people don’t want. Lenders often do not want to have foreclosures on their books. While foreclosures are great news to buyers, lenders are eager to sell in order to earn back the money that is owed to them by the pervious homeowners. You can use this to your advantage. Take a look at the properties that lenders have not been able to sell. If one is promising, you can often get a great price on this property because the lender will be even more motivated to sell.

Sweat equity can be another excellent way to reduce your foreclosure expenses even more. Look for homes that need a little work, such as cleaning and painting. Often, a home that needs maintenance is priced lower. If you are just buying foreclosures for the first time, look for homes that need only minor repairs. The hours you put into fixing the home can add up to substantial savings.

When buying foreclosures, remember to look for special programs and advantages that can help you save more money. Often, these savings depend on the specific type of foreclosure you are buying. If you are buying an HUD home, for example, you may qualify for significant discount if you belong to certain professions. You may also qualify for additional help if you are currently in public housing. If you are buying a VA property, you may qualify for certain advantages usually reserved for members of the military. For example, you may be able to purchase your foreclosed home without having to pay mortgage insurance. If you are buying an REO (real estate owned) property, the lender may consider giving you an advantageous interest rate on your new home loan. Understanding the various advantages of foreclosed homes can help you save more, so do take some time to consider all your options.

Home foreclosures are dreaded by home owners. No home owner ever planned to get into foreclosure. It is probably the last thing on his mind.

How do home owners get into foreclosures?

Foreclosures are caused by home owners defaulting on their mortgage payments. This is caused by many factors like:

1. Job loss or unemployment

2. Medical emergency

3. Death in the family

4. Dispute with co- owner/divorce

5. Excessive debt obligations

6. Unexpected expenses

The major issue in avoiding foreclosure is preventing the filing of a notice of default. If you know you are going to default on your payments, you must call your lender. Don’t put off or ignore letters from lender as doing this will make the situation worse.

Depending on your situation, the lender might propose the following options:

1. Additional time to make your payments: this is a policy of forbearance in which

2. the lender agrees to wait before taking action against you and gives you more time to work out an affordable repayment plan.

3. Waiving a payment: Rarely this happens that the lender agrees to waive a payment or two.

4. Widening the time of payment: In a repayment plan, the lender might allow you to make missed payments spread out for a longer period of time.

5. Changing the loan terms: The lender might change the loan terms like cutting interest rates or extending amortization period.

6. Make a new loan: some government provisions let house owners qualify for another loan which will pay back the existing loan payments termed as partial payment.

How to stop Foreclosure?

Once foreclosure has been filed, you have limited options. So it is better to take adequate measure before foreclosure is filed on your property. Some of your options are:

1. Sell your property: Consult real estate agents to find about the value of your property.  Full service brokers must be consulted.

2. Short Sale: You might look at Short sale of your property if your home is worth less than that you owe. A short sale affects credit history bit is not as bad as Foreclosure.

3. Sign a Deed in Lieu of Foreclosure: this is the process of giving back the deed to the lender. The home owner gives the lender a notarized and prepared deed and the lender cancels foreclosure proceedings.