Loan modifications, short sales, deed-in-lieu programs can indeed help many people avoid foreclosure.

The reality, though, is that the loan modification programs aren't really working for most people.  Most short sales don't close.  HAMP's new deed-in-lieu (see earlier posts) sounds really promising to me, but it's way too soon to tell.

Foreclosures are  up.  The year 2008 saw about 2.5 milion nationally, and RealtyTrac expects 2009 to come in at 2.8 million to 3 million. Forecasts go up dramatically from here, with the number expected to hit 5 million at the end of 2011 before reversing the trend. And they're hitting people with high FICO scores.

What happens if someone does nothing?

If you can do something, do it. Foreclosure is a horrible thing (see the video), and people need to do their best to avoid it. But what if they do all they can and nothing works?

Well, at that point, their credit is probably already trashed. Foreclosure happens to people for a reason--someone lost a job, a medical emergency happened, both of these and a lot of other emergencies--and they are where they are. Some people need to consider staying in their homes and letting the chips fall where they may.

In Oregon, foreclosure takes 120 days between the filing of a Notice of Default and the public auction. In most instances, lenders have been waiting for months before filing the Notice. If someone has done all that s/he can do, why not just stay in the home and wait for the foreclosure guillotine to fall? People have to live someplace, and the law allows them to stay in the home until the auction. Why not stay put and save a little money to get back on their feet?

Just sayin'.