A growing number of home owners paying their mortgages late could become home owners faced with foreclosure -- a threat to what's likely their most valuable asset.

Nationwide, the delinquency rate for mortgages on one- to four-unit residential properties rose 10 basis points to 3.82 percent during the second quarter of 2000, according to the Mortgage Bankers Association of America.

The increase in delinquencies was the first after sixth consecutive quarterly declines and could signal more foreclosures to come on properties held by over-extended home owners.

"The fact is there are several positive options available to those facing foreclosure. Homeowners should view the foreclosure process, which lasts at least four months, as their window of opportunity to resolve financial problems and develop and implement a plan to stop the foreclosure," says attorney Lloyd M. Segal, author of "Stop Foreclosure Now in California," by Nolo.com a self-help legal information publisher on and off the Internet.

Right now foreclosures in California are down.

Lending institutions started foreclosure proceedings on 21,440 homeowners during the second quarter of this year. That was down 16.1 percent from 25,552 for the previous quarter, and down 15.6 percent from 25,407 for the second quarter a year ago, according to DataQuick Information Systems.

Nationwide, the number of foreclosures is also falling.

However, the sudden rise in delinquencies on the heels of stock market turmoil is worrisome. Many California home buyers tapped investment returns to buy homes they may not otherwise have been able to afford. Should the stock market fail to regain it's pre-Spring 2000 luster, increased delinquencies could turn into increased foreclosures in the Golden State and elsewhere.

"Many Silicon Valley residents are definitely over-extended. I pay thousands of dollars in credit card bills on a daily basis when handling refinances. With new purchases, the buyers often do not have money for the down payment and rely on gifts from relatives," said Joette Joseph, a branch manager of VP Alliance Title Co. in San Jose, CA.

Legally, lenders can begin foreclosure when you miss your first payment, but most don't begin actual proceedings until after several months of consecutively missed payments.

Sift through your original loan documents to learn what foreclosure procedure you face. Once the clock starts it's up to you to stop it before time runs out.

Two-thirds of all homeowners in default are able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying the mortgage off, according to DataQuick.

Examine your options

Assuming you want to keep your home, here are some basic dos and don'ts to help you stop foreclosure.

Published: September 29, 2000

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.