Foreclosures in San Louis, Obispo County are moderate at this point compared to the U.S. average, but could worsen quickly, especially in the economic situation we are facing today. When the U.S. is in good financial shape, so is California, but when it is in bad shape, California seems to feel it more than any other state.

The causes for the current foreclosures are due mostly because of falling property values. Houses just are not selling as they were just a year ago. Houses that sold for $450,000 to $600,000 a year ago are now going for $250,000 to $370,000. Adjustable Rate Mortgages are also a problem because interest rates fluctuate. Many people are overleveraged, meaning that they have more debt than equity. People with high interest credit cards and people trying to "keep up with the Joneses" are also in danger of foreclosure. As in any foreclosures, those primarily affected are the working class. Although foreclosures have been coming down a bit for the past nine months, the feeling in real estate circles is that the worst is still yet to come.

Foreclosures are probably the worst credit problem anyone will face because the possibility of losing your home is devastating. It doesn't take much to be in danger of a foreclosure; generally, all you need to do is be delinquent in your payments for three months before the foreclosure process begins.

If you find yourself facing foreclosure, your best bet is to talk openly and honestly with your lender. The lender might offer some options to help you avoid foreclosure. One option is forbearance, which is resuming payments, but with additional money to cover missed payments and late fees over a period of time. The lender will generally ask for a large fee up front before agreeing. The lender can offer you a deferment, which is the lender agreeing to suspend payments for a period of time. This is unusual as lenders don't usually like this type of arrangement due to the risks involved, unless you can prove that you will have money coming in, like in an inheritance, bonus or promotion.

Whatever the reasons for foreclosing, the best way to deal with the situation is to educate yourself on what your options are and to find a foreclosure specialist that can assist you in either keeping your home or help you sell it before foreclosure goes into effect.