When you realize your dream of home or farm ownership, the prospect of foreclosure is the furthest thing from your mind. Still, thousands of people in northwest Arkansas and southwest Missouri are faced with the prospect of losing their farm or home due to increased or unexpected expenses, or because of an unforeseen hardship such as illness, unemployment or divorce.
Foreclosure is the right of the mortgage company to assume ownership of the property if the homeowner isn’t living up to the terms of the mortgage agreement. Foreclosure laws vary by state, but in Arkansas the process usually starts if the homeowner misses three payments. Once the process is complete, the homeowner is forced to move out of the house, and forfeits his or her original down payment and any equity that was built.
Foreclosures have a negative impact on lenders, homeowners and the community at large. The Office of the Comptroller of the Currency (OCC) estimates that the loss to lenders ranges between $40,000 and $50,000 per each foreclosed home. Foreclosures also decrease the value of surrounding properties, and make it more difficult to refinance or obtain new financing.
However, foreclosures have the most profound impact on homeowners, as they lose all equity in their homes, as well as have their credit scarred.
But there is hope for homeowners who are facing foreclosure.   
“When a homeowner is facing a foreclosure, it is important to deal with the issue as soon as possible,” said Mark Foster, Director of Education with Credit Counseling of Arkansas (CCOA). “Early communication with the lender is the key to a good solution.
“If income is reduced and you’re trying to decide which bills to pay, you always want to pay your mortgage first,” Foster said. “Obviously, it is not good to avoid payment on anything, but your home payment should be your top priority.”
As a resource for homeowners, Foster pointed to non-profit HUD (Housing and Urban Development)-certified agencies that offer mortgage delinquency counseling to homeowners at no charge. The goal is to help the client address the situation and develop strategies such as a repayment plan or mortgage modification that can help the homeowner avoid foreclosure. Many HUD-certified counselors will even contact the mortgage company on the client’s behalf to work out an arrangement that is satisfactory for both the lender and the homeowner.
But regardless of whether you seek help from a professional or try to save the home yourself, it is imperative that you address the issue before it gets out of hand. The sooner you act, the better chance you will have to fight foreclosure and preserve your dream of home ownership.  
Mary Catherine Harcourt is with Credit Counseling of Arkansas.

AdministratorAg-VisorsArkansasWhen you realize your dream of home or farm ownership, the prospect of foreclosure is the furthest thing from your mind. Still, thousands of people in northwest Arkansas and southwest Missouri are faced with the prospect of losing their farm or home due to increased or unexpected expenses, or...The Ozarks' most read farm newspaper, reaching more than 58,000 readers in Missouri, Arkansas and Oklahoma