Avoiding Home Foreclosures

Has your financial situation changed due to a mortgage payment increase, loss of job, divorce, medical expenses, increase in taxes or other reasons?

Is your credit card debt becoming unmanageable?

Are you using your credit cards to buy groceries?

Is it becoming difficult to pay all your monthly bills on time?

Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems. Every year a million families face losing their homes to foreclosure. The best time to act to stop a home foreclosure is before you  miss your first payment. Communicate with your lender as soon as you know you'll miss payments or be late. According to lender Freddie Mac, nearly half the people who have their homes foreclosed never have a conversation with their lender. Try to negotiate repayment plans. You may be allowed to delay payments or add past due amounts to the balance of your mortgage and extend it over a longer period of time. Don't put it off, be embarrassed or ignore letters from your lender because those responses will make the situation worse, not better. It's better to be proactive and call your lender then to hide from their letters and phone calls

Information To Have Ready When You Call:

• Your loan account number
• A brief explanation of your circumstances
• recent income documents such as pay stubs, Social Security benefits statements, disability, unemployment, retirement, or public assistance. If you are self-employed, have your tax returns or a year-to-date profit and loss statement from your business available for reference)
• List of household expenses

Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for assistance, you must complete the forms and return them to your lender quickly. The completed package will be reviewed before the lender talks about a solution with you.

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.

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.

Avoid scams by contacting 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.