As the Congress works to craft a bailout package, I’m asked by people affected by our economic environment how to avoid foreclosure if they get behind in their payments. There are many stories out there about how people have been falling behind such as an adjustable rate mortgage adjusting without any equity available to refinance, job loss, the need to be more conservative with household spending, and tightening in the credit market, among others.
The Department of Housing and Urban Development (HUD) Tips to Avoid Foreclosure:
1. Don’t Ignore the Problem. The longer you wait, the further behind you’ll get and more difficult it will be to bring your loan current.
2. Contact the Lender As Soon As You Realize There’s a Problem. With the current inventory of foreclosures, you lender does NOT want your home. Call them early since many have options available and can work with you.
3. Open and Respond to All Mail From Your Lender. The first notices your receive when in delinquency will contain a lot of information on options and resources available to help. Engage your lender early so they can work with you. Ask to speak with Loss Mitigation to be connected with those most able to help.
4. Know Your Mortgage Rights. Read your loan documents and know what your rights are. Colorado also has a Foreclosure Hotline at 1-877-601-HOPE, for a free consultation that can assist in understanding the process.
5. Understand Foreclosure Prevention Options. You may be able to refinance into an FHA-backed loan or have other options available. Your lender’s Loss Mitigation department may also be able to work with you to identify options.
6. Contact a HUD-Approved Housing Counselor. HUD funds free or low cost mortgage counseling nationwide. They can help you understand the law, get your finances in order, and represent you in negotiating with your lender. Find a Counselor near you or call (800) 569-4287.
7. Prioritize Your Spending. After medical expenses, keeping your home should be your highest priority for household spending. Look at your spending and cut out any unnecessary spending until you have your budget in order and your loan up to date. Delay payments on credit cards and other unsecured debt until your mortgage is current.
8. Use Your Assets. Look at what assets you have available to bring your mortgage current. Consider a second car, insurance policy, and anything else you can pay sell to pay your mortgage. Actively look at ways to increase access to cash, even if you can’t raise the entire payment, it will demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid Foreclosure Prevention Companies. Don’t pay fees for foreclosure prevention, use this to make payments! Companies offering to handle negotiations for you don’t provide any additional results that a HUD Counselor or direct talks with your lender can work out.
10. Don’t Lose Your House to Scams. Yes, there are people and companies that will ask you to sign documents allowing them to negotiate for you. You may very well be signing over your home! Never sign a legal document without understanding all the terms and having it reviewed by an attorney, trusted real estate agent, or HUD Counselor.
In some cases, selling your home may be best for you and your family. There’s nothing wrong with moving out of your home and it’s much better to sell your home, possibly at a loss that can be negotiated with your lender, than to lose it to foreclosure. If you owe more on your home than it’s worth and you need to sell, work with a real estate agent experienced in working with lenders and handling homes sales known as short sales.
 |
 |
{ 1 comment… read it below or add one }
This Is a very informative blog , I am really pleased to post my comment on this blog . It helped me with ocean of knowledge so I really believe you will do much better in the future . Good job web master.