Today, millions of Americans are unable to manage their monthly mortgage payments, especially those who bought homes in the past few years and took advantage of low, adjustable-rate mortgages requiring little or no down payment. Since then, home values have decreased while adjustable interest rates have increased. Consequently, many are faced with escalating mortgage payments but are unable to sell or refinance their home because they owe more than it is worth.

"If people anticipate trouble making mortgage payments, I urge them to confront the issue head on, before they miss a payment," says Andrea Menzer, a mortgage loan originator with Fifth Third Bank. "Avoiding the issue only makes matters worse."

She realizes falling behind on mortgage payments can be a highly emotional issue. But, it's better to make arrangements before missing payments, because that can help prevent a negative impact on credit scores.

Tips to help avoid foreclosure
"Not everyone who falls behind on mortgage payments faces certain foreclosure," she continues. "Usually, foreclosure is a last resort, after the lender has tried to work out other arrangements."

To help people avoid foreclosure, she encourages people to call their lender's loss mitigation department or foreclosure department, which may be willing to discuss any of the following options:

• If the borrower has fallen behind on payments, perhaps the lender may agree to accept the total amount owed as a lump sum by a certain date.
• Perhaps the lender will allow the borrower to reduce or suspend payments for a short period of time. When payments are resumed, the borrower will agree to make monthly payments for a longer period of time.
• Perhaps the lender and borrower will agree to resume monthly payments that include a portion of the past-due payments until the borrower is caught up.
• Perhaps the lender will agree to permanently change the interest rate or extend the number of years a buyer has to pay the loan.

If the borrower has an insured mortgage, he or she may be allowed to borrow money to make the mortgage current.

Menzer also encourages people to seek additional information and advice from a housing counselor.

Other survival tips
Along with the ongoing mortgage crisis, many Americans are having trouble managing credit cards and loans. This year, personal debt (excluding mortgages) in the United States reached an all-time high, nearly $19,000 per household, according to recent figures from the Federal Reserve Board.

To help survive during this slow economy, Menzer also encourages people to practice basic money management strategies:

• Keep a spending diary by tracking where all money goes.
• Create a budget and stick to it.
• Build up a 3-month emergency fund.
• Strive to pay off credit, often one bill at a time.
• Buy groceries and cook instead of eating out.
• Keep insurance, but consider raising the deductible.
• Hold off on major purchases, especially those bought on credit.
• Carpool or use public transportation when possible.
• Look for free entertainment.
• Spend wisely during the holidays.

For more tips on managing finances during a tight economy, contact Fifth Third at (866) 475-4201 or visit 53.com.