Avoiding Foreclosure

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Written by Administrator | 01 September 2009

Avoiding Foreclosure

Are you, like so many now, having trouble keeping up with your mortgage payments?
Have you received a notice from your mortgage company asking you to contact them?
Well first off, do not ignore the problems you are having with the payments or your mortgage company.
The further behind you become, the harder it will be and the more likely that you will lose your home.

Contact your lender when you know you are having problems.

Most, if not all mortgage Lenders do not want your home. They all have options to help borrowers through difficult financial times.
Be sure to respond to all mail from your lender, as hard as that may be for you to do. When you do not have the payment most people hesitate to contact them, that is a mistake. You cannot resolve your problems with out communication.

Be sure you 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.

Be sure you understand foreclosure prevention options that are available to you.

There is valuable information about foreclosure prevention (also called loss mitigation) options that can be found on the internet at hud.gov .
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.

Be sure you prioritize your spending habits.

After your healthcare, keeping your home should be your first priority. Review all your finances and see where you can cut spending in order to make your mortgage payment.

Look for any optional expenses you may have such as Cable TV, club memberships, Internet service, Cell phone, vehicles you do not really need, etc. that you can eliminate. You may need to delay payments on credit cards and other "unsecured" debt until you have paid your mortgage, as say that needs to be top priority.

Using your assets that you may have is another option.

You may have, jewelry, a whole life insurance policy that you can cash in to help reinstate your loan? Can you or anyone else in your household get an extra job to bring in additional funds? Even if these efforts don't significantly increase your available cash or your income, they demonstrate that you are willing to make sacrifices to keep your home.

Be sure to 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.

Loan Modification:

You may qualify for a loan modification. Under the Home Affordable Modification program, the target maximum amount for your mortgage payment (or mortgage debt-to-income) should be 31% of your gross (pre-tax) monthly income.

What is "Making Home Affordable" all about?

The Making Home Affordable Program is part of the Obama Administration's broad, comprehensive strategy to get the economy and the housing market back on track. The Making Home Affordable Program offers two different potential solutions for borrowers: (1) refinancing mortgage loans, through the Home Affordable Refinance Program (HARP), and (2) modifying mortgage loans, through the Home Affordable Modification Program (HAMP).

And do not 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.

Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their homes. Recognize and avoid common scams.

Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan.

Beware of people who pressure you to sign papers immediately, or who try to convince you that they can "save" your home if you sign or transfer over the deed to your house.

Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

Never make a mortgage payment to anyone other than your mortgage company without their approval.

We will continue to add resources and have some discussions on here soon.

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