FORECLOSURE PREVENTION TIPS
Having trouble keeping up with your mortgage payments? Received calls or notices from your lender?
Foreclosure – a legal proceeding that prevents or takes away a mortgagor’s right of redeeming a mortgaged estate
1. Don’t ignore the problem. Most homeowners avoid contacting lenders about their financial difficulties because we:
A. Feel embarrassed to talk about financial problems
B. Believe that if lenders know we are having difficulties, they will immediately go after us to foreclose our property.
The more payments you are behind, the harder it will be to get help with your loan and more likely to loose your home.
FORECLOSURE PREVENTION TIPS
Having trouble keeping up with your mortgage payments?
Received calls or notices from your lender?
Foreclosure – a legal proceeding that prevent or take away a mortgagor’s right of redeeming a mortgaged estate
1. Don’t ignore the problem. Most homeowners avoid contacting lenders about their financial difficulties because we:
A. Feel embarrassed to talk about financial problems
B. Believe that if lenders know we are having difficulties, they will immediately go after us to Foreclose our property.
The more payments you are behind, the harder it will be to get help with your loan and more likely to loose your home.
2. As soon as you find difficulties to pay your mortgage, contact your lender as soon as possible. Lenders are more inclined to help homeowners keep their homes because:
Foreclosure is expensive for lenders, mortgage insurers and investors
HUD and private mortgage insurance companies and investors like Freddie Mac and Fannie Mae require lenders to work aggressively to help borrowers who have financial problems
Lenders have workout options (choices) to help you and:
- These options work best when your loan is only one or two payments behind
- The farther behind you are on your payments, the fewer options are available
3. Read and respond to all mail from your lender.
The first notices you receive will usually provide good information about foreclosure prevention options that can help you weather financial problems. Future mails may include important notice of pending legal actions. Your failure to respond to the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet. Take me there.
6. Contact a HUD-approved housing counselor.
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.
7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.
8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies.
You don’t need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.
10. Don’t lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.