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Tips for Avoiding Foreclosure
- Don't ignore the problem.
The further behind you become, the harder it will be to
reinstate your loan and the more likely that you will lose your
house.
- Contact your lender as soon as you realize that you have
a problem.
Lenders do not want your house. They have options to help
borrowers through difficult financial times.
- Open and respond to all mail from your lender.
The first notices you receive will offer good information about
foreclosure prevention options that can help you weather
financial problems. Later mail may include important
notice of pending legal action. Your failure to open the
mail will not be an excuse in foreclosure court.
- 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 contact the State Government Housing
Office.
- Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called
loss mitigation) options can be found on the internet at
www.fha.gov.
- Contact a non-profit housing counselor.
The U.S. Department of Housing and Urban Development 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.
- Prioritize your spending.
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
option expenses -cable TV, memberships, entertainment - that you
can eliminate, Delay payments on credit cards and other
"unsecured" debt until you have paid your mortgage.
- Use your assets.
Do you have assets, a second car, jewelry, a whole life
insurance policy, that you can sell for cash to help reinstate
your loan? Can anyone in your household get an extra job
to bring in additional income? Even if these efforts don't
significantly increase your available cash or your income, they
demonstrate to your lender that you are willing to make
sacrifices to keep your home.
- Avoid foreclosure prevention companies.
Many for-profit companies will contact you promising to
negotiate a loan work out 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 for free if you contact them. You don't need
to pay fees for foreclosure prevention help, us that money to
pay the mortgage instead.
- Don't 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 a 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 HUD approved housing
counselor or trusted real estate professional.
To find out more about HUD-approve housing counseling agencies
and their services, please visit
www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call toll free
(800)569-4287 on weekdays between 9:00am and 5:00pm Eastern Standard
Time (6:00am to 2:00pm Pacific Time). The same number can give
you an automated referral to the three housing counseling agencies
located closest to you.
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