HOW TO AVOID FORECLOSURE
During the course of your life, there is a very good chance that you will experience some type of financial hardship which could lead to foreclosure if not handled properly. If you miss three or more mortgage payments, you are nearing foreclosure. There is help available.
An important thing for you to know is that you are not alone. Everyone will go through financial hardships. Obviously, the extent of those hardships are different for everyone but at some point, we all need help in one way or another. Don’t be too embarrassed to reach out to the appropriate sources. There are many ways for you to get help. You just have to be willing to ask for it.
WHAT TO DO IF YOU ARE HAVING FINANCIAL PROBLEMS
Do NOT ignore the letters from your mortgage company! Do NOT move out of your home and give up! Call your mortgage company and be prepared to answer questions and provide financial documentation. You may be surprised to learn that mortgage companies do NOT want your home. They don’t make money that way. They only make money if you can make your payments. Therefore, mortgage companies are willing to work with you in numerous ways to keep you in your home and help you through your difficult time. Call them immediately!
You can also call a HUD – approved housing counseling agency. They sometimes have information regarding many different programs available in your community to assist you. They will also assist you in dealing with your lender, if you need it. Call the main number and get referred to the approved agency that is nearest to you. The number for the main referral service is: 1-800-569-4287 or the TDD number is: 1-800-877-8339.
OPTIONS FOR ASSISTANCE
Once communication is open between you and your lender, there are many different options that may be available to you. Discuss all of these options with your lender until you have found one that will work best for you.
SPECIAL FOREBEARANCE Sometimes the mortgage lender can arrange a special payment plan that involves suspending or reducing your mortgage payment for a certain amount of time. They will only do this if they feel confident that you will be able to resume normal payments soon and make up the additional amounts in a preset plan of repayment.
MORTGAGE MODIFICATION The mortgage lender may feel that a modification will work best for you. If you have had a reduction in income and can’t make the same payment, but can make a normal payment, they may attempt to extend the mortgage, refinance it or reamortize it to reduce your monthly payment.
PARTIAL CLAIM Sometimes it is possible to get an interest-free loan from HUD. These loan funds are used to bring the mortgage current. This option is used when you are beyond four months delinquent, can’t seem to catch up, haven’t gone into foreclosure and can make the full regular payment.
PRE-FORECLOSURE SALE Lenders will sometimes delay the foreclosure process if you are trying to sell your home quickly to avoid foreclosure. If they feel confident that the home has enough equity to sell for enough to pay off the lien and will sell within 3 to 5 months, the lender will consider this option.
DEED-IN-LIEU This is a “last resort” option. Try all other options before you do this. A deed-in-lieu of foreclosure is basically where you hand the home to the lender and walk away. Obviously, this is not an option if you don’t want to leave the house. If you feel this is an option for you, try selling the property first. A deed-in-lieu is still considered a foreclosure on your credit report.
BANKRUPTCY – CHAPTER 13 This is also a very “last resort” option. Before you decide to do this, talk to a couple of different attorneys regarding your options. The fact is that a Chapter 13 Bankruptcy can stall some foreclosure processes and work out repayment plans that work within your budget. Before you even consider this, however, talk to the lender directly.
AVOID SCAMS
There are many scams that you could fall victim to during this time of financial hardship. If a foreclosure has been filed on your property, it is public record and the scam artists will start appearing out of no where with promises of grandeur.
Do not sign anything! Do not sign your deed over to anyone! The only time you should be signing your deed over to anyone is if you are truly selling your home and transferring title. If someone is offering to purchase the home on assumption, you need to realize that an assumption does not release you from financial responsibility. Talk to the HUD counseling service with any questions about services that are being offered to you. Talk to your lender yourself before paying someone else to do this. Regardless of the promises that you hear, there is nothing that someone else can do for you that you can’t do yourself. Be careful.
One last word of caution. If you decide to sell your property, check out your prospective buyer with the state attorney general, the state real estate commission or the local district attorney’s consumer fraud unit for any information regarding this prospective buyer. There are other scams that you could be victim to. You need to protect yourself.
SUMMARY
It’s best if you contact your lender the first month that you experience problems. However, if it goes beyond that point, all is not lost. Get the communication going between yourself and your lender. Be honest, upfront and realistic about what you can and can’t pay. The lender wants to help you stay in your home.
Please visit www.TheCincyHouseBuyer.com to know more about home foreclosure, Avoid Foreclosure.
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