Foreclosure – How to Avoid It
Tips for Avoiding Foreclosure
Are you having trouble keeping up with your mortgage payments? If you can’t make your payments, don’t ignore the problem! The longer you wait, the more difficult it will be to reinstate your loan, and the more likely it becomes that you may lose your house.
Have you received a notice from your lender asking you to contact them? Open and read any communication from your lender. Your lenders do not want your house. They can offer options to help you through difficult financial times. The first few notices will offer possible solutions for your problem. Later mail may include importance notices of pending legal action – not opening your mail is not a legal defense in foreclosure court. Contact your lender as soon as possible, to have more options.
Find your loan documents and read them – know what can happen if you can’t make your payments. What is your lender allowed to do? Know your rights. Learn what your state’s foreclosure laws (and timeframes) are; contact the State Government Housing Office.
Review your finances; where could you cut spending? Prioritize spending – healthcare and keeping your house are important. Can you cut out cable, club memberships, entertainment? Make arrangements to delay payments on unsecured debt (credit cards) until you have paid your mortgage.
Use your assets. Is there something you could sell for cash, a second car, jewelry, extra TVs? Is there a way to bring in additional income – a second job? These efforts will show your lender that you are willing to sacrifice to keep your house.
You do not need to pay for foreclosure prevention help. These may be legitimate businesses, but you can get the same information and services from your HUD-approved housing counselor. Some firms may offer to stop your foreclosure immediately, but signing a document may give them title to your property. Do not sign any legal document without reading and understanding the terms and getting professional advice from an attorney or real estate professional, or a HUD-approved counselor.
Contact a HUD-approved housing counselor. The U.S. Department of Housing and Urban Development (HUD) funds free or low-cost housing counseling, nationwide. They can help you understand your options and the law, help you organize your finances, and will even help you negotiate with your lender. To find a HUD-approved housing counselor, call (800) 569-4287 (TTY (800) 877-8339).