Foreclosure Prevention

Foreclosure Prevention

What Should I Do?

  1. Do not ignore the letters from your lender. If you are having problems making your payments, call or write to your lender’s Loss Mitigation Department without delay.
  2. Stay in your home for now. You may not qualify for assistance if you abandon your property
  3. Contact a HUD-approved housing counseling agency

What Are My Alternatives?

  1. Special Forbearance.-Your lender may be able to arrange a Final Output  repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments
  2. Mortgage Modification-You may be able to refinance the debt and/or extend the term of your mortgage loan. This may help you catch up by reducing the monthly payments to a more affordable level.
  3. Partial Claim.-Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.
  4. Pre-foreclosure sale- This will allow you to avoid foreclosure by selling your property for an amount less than the amount necessary to pay off your mortgage loan
  5. Deed-in-lieu of foreclosure. -As a last resort, you may be able to voluntarily “give back” your property to the lender. This won’t save your house, but it is not as damaging to your credit rating as a foreclosure

The Main Points

1. Don’t lose your home and damage your credit history.

2. Call or write your mortgage lender immediately and be honest about your financial situation.

3. Stay in your home to make sure you qualify for assistance.

4. Arrange an appointment with a HUD-approved housing counselor to explore your options.

5. Cooperate with the counselor or lender trying to help you.

6. Explore every alternative to keep your home.

7. Beware of scams.

8. Do not sign anything you don’t understand. And remember that signing over the deed to someone else does not necessarily relieve you of your loan obligation.

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