Are you having trouble keeping up with your mortgage payments? Have you received a notice of default from your lender?
- Don’t ignore the letters from your lender
- Contact your lender or a qualified foreclosure attorney immediately
- Contact a HUD-approved Housing Counseling Agency
If you are unable to make your mortgage payment:
1. Don’t ignore the problem.
The further behind you become, the harder it will be to reinstate or modify the terms of your loan and the more likely that you will lose your house.
2. Contact your lawyer 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.
3. Open and respond to all mail from your lender.
The first notices you receive will offer information about foreclosure prevention options that your lender is offering directly. These first offers are essentially the lenders “opening offer” to you, such offers are NOT the best offers. Contact an attorney to negotiate your best offer. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. 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 or your attorney.
5. Understand foreclosure prevention options.
Some options that are available are: loan modification, reinstatement, forbearance agreements, deed in lieu of foreclosure, short sales, or bankruptcy.
6. Contact a HUD-approved housing counselor.
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, and organize your finances. Such assistance is great to get general information about the process. If you are serious about keeping your home, it is usually best to get professional representation. The modest cost of such representation by an attorney will be more than offset by the long term savings of a lower interest rate or mortgage payment.
7. 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 optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your attorney to keep you in the property.
8. Use your assets.
Do you have assets such as a second car, jewelry, a whole life insurance policy that you can sell for cash to help pay for loan reinstatement services? 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.
9. Avoid foreclosure prevention companies, hire only a qualified Attorney.
You don’t need to pay fees for foreclosure prevention help from some unregulated bail out company, use that money to pay for legal counsel or pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender; 99% of these companies are a scam! They will charge you a hefty fee (often two or three month’s mortgage payment) for information and services you could get for free. If you do pay for assistance, hire a qualified mortgage and foreclosure attorney to help you.
10. 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 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.