Avoiding foreclosure, especially for first-time homeowners, is crucially important as foreclosure rates rise across the country.

Locally, the Delaware Valley has largely sidestepped this growing nationwide problem but it’s certainly there, lurking ominously in the wings, particularly for strapped homeowners with subprime loans or those in over their heads with the homes they bought with little or no downpayment.

Work on the assumption that an ounce of provention is worth a pound of cure, urged Jim Ryal, 2008 chairman of the Suburban West Realtors Association and an associate broker with the Bryn Mawr office of Prudential Fox & Roach.

Among his advice:


Become educated about the basics of a real estate transaction. Among the Web sites to cruise: the U.S. Department of Housing and Urban Development, commonly known as HUD (www.hud.gov), and the NeighborWorks Center for Homeownership Education and Counseling (www.nw.org). HUD can also provide free or low-cost counseling. And ask your real estate agent or another real estate

professional to explain anything you don’t understand.

Choose the right loan for you. Shop for and compare rates, terms and conditions to find a loan that best suits your needs. Know the mortgage vendors you’re dealing with to make sure they’re reputable.

Among the questions to ask yourself:

How long do I plan to stay in this house?

What monthly payment amount can I really afford?

Understand non-traditional loans. They’re often intricate, exotic -- and can get you into a peck of trouble if your financial picture changes and/or values of comparable houses in your neighborhood don’t rise enough to allow for more equity and thus refinancing.

Communicate. Should you fall a month or more behind on mortgage payments, remember that the key is, “Communicate, communicate, communicate,” according to Ryal.

“Lenders, at the end of the day, are much better off helping a borrower and working with him or her than foreclosing on a property and actually taking possession of it,” he explained. “Lenders aren’t in the home ownership business; they’re in the lending business.”

And many lenders during the current state of affairs are more likely to negotiate or modify loans.

Oftentimes, a homeowner can stay put when communication is open and a payment plan is hammered out. If not, sometimes the property can be sold and at least some of its value recouped.

When a homeowner is forced to leave a home, it becomes an expensive proposition for the lender; utilities are usually turned off, the home has often fallen into disrepair and its value diminishes precipitously.

Another possible solution: Deed-in-Lieu of Forclosure. This conveys the property’s title to the lender when the borrower ultimately defaults on the loan, a process that can take months and even years. Having a deed, though, may prevent the foreclosure from being recorded and becoming public record. Your credit history could still be crunched, but not as badly if foreclosure proceeds unabated.

The short sale. This occurs when the lender decides it’s in its best interest for the owner/borrower to sell the property for less than the mortgage balance owed. Thus the borrower ends up with no home and receives no value back — or at least loses money — on the property. Credit implications, once again, aren’t as bad as they are when foreclosure occurs.

Also, urged Jacob Benaroya, president and managing partner of the Biltmore Capital Group, which purchases distressed loans from lenders, beware of foreclosure prevention companies, which often promise loan negotiation but charge a hefty fee.

Don’t lose your home to foreclosure recovery scams. If a company claims it can stop foreclosure immediately once you sign a document giving it the right to negotiate on your behalf, you may well be signing over the title to your home, Benaroya said. Don’t do it!

Use other assets. Do you have a second car, valuable jewelry, antiques or a whole life insurance policy that can be sold to pay off your mortgage? Can anyone in your house bring in more income? Even if these efforts don’t help much, they demonstrate you’re willing to make sacrifices to retain your nest.

Finally, rein in your spending. After paying for health insurance, “Keeping your home should be your first priority.” Delay payments on credit cards and other “unsecured” debt until you pay your mortgage, Benaroya cautioned.

To contact staff writer Sarah E. Moran, send an e-mail to smoran@dailylocal.com.