Avoid Foreclosure

The Homeowner Affordability and Stability Plan 

Complete details of President Obama's program will be announced on March 4th when the program begins. The Treasury Department has created a Web site for the program that provides all information related to the program as it becomes available.

The details provided by the Treasury Department are viewable below.

http://www.makinghomeaffordable.gov/index.html
Fact Sheet
Summary of Guidelines
Complete Guideline
For additional information please visit www.financialstability.gov or contact our office and speak with a housing counseling for a free counseling session.
How do I know if I have a Freddie Mac mortgage?
How do I know if I have a Fannie Mae mortgage?

Beware of scams
The FTC has provided links for a flyer and a bookmark that can be used to help warn homeowners against scams.    English:  http://ftc.gov/bcp/edu/microsites/moneymatters/your-home-foreclosure-rescue-scams.shtml 
English and Spanish:   http://ftc.gov/bcp/menus/consumer/credit/mortgage.shtme

Avoid Foreclosure

Now that I'm in my home, what happens if I can't afford my mortgage payments? Can they take my house away from me? What steps can I take to avoid foreclosure? Can anyone help me? What happens next?

First lets define foreclosure; foreclosure is a legal process that lenders pursue in order to take possession of your home if you default on your mortgage commitment. When you purchased your home you signed an agreement with your lender that stated in the event you were unable to pay your mortgage, as a remedy, your lender could claim your property. Basically, your home acts as its own collateral, securing the loan if you default. 

You are not alone.

In 2007, more than 635,000 foreclosure filings were reported nationwide - one for every 196 households. Most were unable to handle the increase in their monthly payment when their adjustable rate mortgage(ARM) reset. For many, the increase represented a 30% jump in their monthly mortgage payment. A jump they knew would take place, but were unprepared for. Other reasons behind mortgage delinquency include; loss of employment, illness, divorce, death, poor money management, etc.

Unfortunately, despite efforts to remain current with their mortgage many home owners ultimately were forced into foreclosure. 

Here are some ways to avoid foreclosure:

Know the signs 

Be honest with yourself and do not ignore signs of impending financial strain. Be aware of changes as they occur and take a proactive approach to address them before they escalate. It will not take a lot for you to realize that you will not be able to pay certain bills. This may be a clear sign that your expenses exceed your income, or that your budget needs balancing. Whatever the circumstances, immediate action must be taken. Ask yourself; 1) Can I reduce my spending? 2) Can I increase my income? 3) Can I sell assets? These types of questions will allow you to determine what options you have and what might be the best to implement. Contact our office and speak with a Certified Credit Counselor for budgeting assistance and debt consolidation options. 

Contact your Lender or a HUD approved Housing Counseling Agency. 

If you are already past due with your mortgage contact your lender right away! Don't wait for the problem to solve itself, because it won't. Most lenders have internal programs designed to help distressed borrowers. However, with many lenders the further past due you are the less options you may have available to remedy the situation.

Remember, you're not the first person to contact your lender because you're having difficulties. It's in your lenders best interest to provide you with some form of relief. The average cost incurred by lenders to foreclose on a home is approximately $40,000.00. Mortgage lenders are not real estate agents, therefore they do not want to take possession of your home and attempt to sell it. But make no mistake, if you default on your mortgage, they will. Don't be embarrassed to let your lender know you're having difficulties with your payments, chances are they already know.

A common misconception is that if you make your lender aware of your difficulties they will accelerate the collections and foreclosure process. Your lenders will not speed things up, as mentioned earlier; they want to resolve the situation before it gets worse on its own.

Open your mail 

Be sure to open all letters sent to you by your lender. Ignoring them doesn't solve anything. Lenders will provide valuable information through the mail which may include mortgage work out options. Many lenders will attempt to contact you by phone and mail to present options. Make sure you're there to receive them or promptly return any calls.

Responding to calls and letters will let your lender know that you are interested in hearing about what they have to offer. Conversely, if they don't hear from you they will eventually start the process of foreclosure assuming that you are avoiding them and do not wish to work things out.

Reach out for help 

Assistance is out there, go get it! You can call our office for assistance with budgeting, debt consolidation and housing related issues. A certified credit counselor will assess your situation and provide a realistic solution. Telephone counseling is available for your convenience. Our toll free number is 800-498-0766 or you can complete an on line application and a counselor will contact you within three hours of its receipt. Make sure you have all necessary paperwork available to discuss your situation in detail.

Beware of Scams 

Because you may feel that you are in a desperate situation make sure you don't fall victim to unscrupulous operators. Make no mistake, they are aware of the importance of what's at stake and they will take advantage of that fact. Be diligent when researching businesses who make promises that may seem too good to be true. Don't feel rushed into making a decision without fully understanding what's expected of you. You may want to consult an attorney before signing any agreement.  If you believe you have been a victim or feel you may be at risk you can visit StopMortgageFraud. For additional information on predatory lending you can also visit Freddie Mac's Predatory lending and Freddie Mac's Don't Borrow Trouble websites.

Selling 

Don't forget you can avoid foreclosure by selling your home. The majority of homeowners that went through foreclosure couldn't afford their home and living expenses in the first place. Reducing mortgage payments and adjusting budgetary expenditures may be the answer you're looking for. It may be time to downgrade your home to alleviate financial shortfalls. Contact a real estate professional and see what your home is worth.  

Contact our office at toll free 800-498-0766 ext 190 and speak with a certified credit counselor for additional information.  

Defaulting of the American Dream - This study was published by the The Pew Chartable Trust. It raises concerns regarding the repercussions the housing crisis will have on the economy both at the Marco and micro levels. It also addresses what is being done to combat the crisis and the results should it be ignored.

To learn more about our credit counselor services contact our office today at 1-800-498-0766 ext 190 and speak with a certified credit counselor or complete our online form and request to be contacted.