: Foreclosures :

Help for Homeowners Facing
the Loss of Their Home

For most families, a home is not only a significant financial investment but also a source of pride. The loss of a home, due to unexpected events such as unemployment, can be financially and personally devastating.
If you have been laid off or are facing unemployment, you can keep your home - - if you know the right steps to take. The Department of Housing and Urban Development/Federal Housing Administration, the Department of Veterans Affairs, the Department of Labor and the mortgage industry have worked together to produce important basic information - - and key links to local groups and organizations - - that can help you get through difficult times without losing your home.

Facing Money Problems?

Financial problems are most often associated with the following life changes:

Loss of job
Cuts in work hours or overtime
Retirement
Illness, injury, or death of a family member
Divorce or separation
If your family is facing any of these changes and cannot pay your bills, now is the time to look closely at what you owe and what you earn, eliminating unnecessary spending and reaching out for help if you still can't meet your financial obligations. Taking action now can help you protect your family from the loss of your home. This page was created to help you find advice, information, and web links that will help you keep your home.

Steps To Take When You May Be Unable To Pay Your Mortgage

Contact Your Lender NOW!
Talk To A Housing Counseling Agency
Prioritize Your Debts
Explore Loan Workout Solutions
Are You Eligible for Disaster Relief/Military Options?
Beware of Predatory Lending Schemes
Frequently Asked Questions
Try Other Resources
This website is brought to you through the collaborative efforts of HUD/FHA, the Department of Veterans Affairs, Department of Labor, Fannie Mae, Freddie Mac , and members of the mortgage industry.

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Contact Your Lender As Soon As You Have A Problem

Many people avoid calling their lenders when they have money troubles. Most of us are embarrassed to discuss our money problems with others or believe that if lenders know we are in trouble, they will rush to collection or foreclosure.

Lenders want to help borrowers keep their homes. Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems.

Lenders have workout options to help you keep your home. However, these options work best when your loan is only one or two payments behind. The farther behind you are on your payments, the fewer options are available.

Do not assume that your problems will quickly correct themselves. Don't lose valuable time by being overly optimistic. Contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.

Finding Your Lender

Check the following sources for lender contact:

Your monthly mortgage billing statement
Your payment coupon book
Web links or customer service numbers found under "help for homeowners" lenders
Information To Have Ready When You Call:

To help you, lenders typically need:

Your loan account number
A brief explanation of your circumstances
Recent income documents (such as Pay stubs; Benefit Statements from Social Security, Disability, Unemployment, Retirement, or Public Assistance. If you are Self-Employed, have your tax returns or a Year-to-date Profit and Loss Statement available for reference)
List of household expenses
Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for assistance, you must complete the forms and return them to your lender quickly. The completed package will be reviewed before the lender talks about a solution with you.

CALL TODAY! The sooner you call; the sooner help is available.
Do Not Ignore Mail From Your Lender

If you do not contact your lender, your lender will try to contact you by mail and phone soon after you stop making payments. It is very important that you respond to the mail and the phone calls offering help. If your lender does not hear from you they will be required to start legal action leading to foreclosure. This will substantially increase the cost of bringing your loan current.

Information For Families With FHA Loans

The Federal Housing Administration (FHA) provides a wide range of relief options for borrowers. There are many alternatives and ways to get help. These may include mortgage modifications, special forebearances, and other actions you can take to avoid foreclosure.

HUD's National Servicing Center works closely with customers who have FHA insured loans. Do you feel your lender is not responding to your questions? Do you need assistance contacting your lender? The NSC is ready to help!

Return to " Steps To Take"

Talk To A Housing Counseling Agency

If you don't feel comfortable talking with your lender, you should immediately contact a HUD-approved housing counseling agency and arrange an appointment with a counselor. A counselor will help you assess your financial situation, determine what options are available to you, and help you negotiate with your lender. A counselor will be familiar with the various work-out arrangements that lenders will consider and will know what course of action makes the most sense for you and your family, based on your circumstances. In addition, the counselor can call the lender with you or on your behalf to discuss a work-out plan. By meeting with a counselor before your mortgage payments are too far behind, you can protect yourself from future credit problems.

A good counselor will help you establish a monthly budget plan to ensure that you can meet all of your monthly expenses, including your mortgage payment. Your personal financial plan will clearly show how much money you have available to make the mortgage payment. This analysis will help you and your lender determine whether a reduced or delayed payment schedule could help you. Also, a counselor will have information on services, resources, and programs available in your local area that may provide you with additional financial, legal, medical or other assistance that you may need.

To find out more about HUD-approved housing counseling agencies and their services, please call 1 (800) 569-4287 on weekdays between 9:00 am and 5:00 pm Eastern Standard Time. You can also get an automated referral to the three housing counseling agencies located closest to you by calling 1 (800) 569-4287. To look at the list of these HUD-approved agencies by state on the HUD web site, click here.

Many of these local housing counseling agencies are affiliates of national and regional housing counseling intermediaries. The websites for the HUD-approved National and Regional Housing Counseling Intermediaries describe the full range of assistance offered, as well as maps showing location of their affiliates.
Return to " Steps To Take"

Prioritize Your Debts

For the unemployed, getting by will require a new, tightened budget. Prioritize your bills and pay those most necessary for your family: food, utilities and shelter.

Failing to pay any of your debts can seriously affect your credit rating. However, if you stop making your mortgage payments you could lose your house. Whenever possible, any income available after paying for food and utilities should be used to pay your monthly mortgage payments. If your employment income has been stopped or reduced, first consider eliminating or reducing your other expenses (such as dining out, entertainment, cable, or even telephone services). If that does not provide enough income, consider using other financial resources like stocks, savings accounts, or personal property that may have value like a boat or a second car. Take any responsible action that will save cash.

In addition to speaking with your lender, you may want to contact a nonprofit consumer credit counseling agency that specializes in providing help in restructuring credit payments. Credit counselors can often reduce your monthly bills by negotiating reduced payments or long-term payment plans with your creditors. The majority of credit counseling agencies are reputable and provide their services free of charge or for a small monthly administrative fee tied to a repayment plan. Beware of credit counseling agencies that offer counseling for a large upfront fee or donation.

For consumer debt advice contact the National Foundation for Credit Counseling

Use the Internet to find a HUD-approved housing counseling agency
or dial 1 (800) 569-4287 or TDD: 1-800-877-8339. These agencies can provide financial counseling or refer you to a local credit counseling agency.

When you call a consumer credit counseling agency, you will be asked to provide current information about your income and expenses. Make sure you ask if the agency has a charge before you sign any documents!
Preserve Your Good Credit

Do not underestimate the importance of preserving your good credit. Your future ability to purchase certain items, rent or buy a home, and complete other transactions often requires a credit check. Consumer credit agencies and your lender can help you explore solutions to keep your credit from getting blemished.

Maintaining good credit is even important for job hunters. When you apply for a job, the employer probably will check your credit report to determine:

whether you have been sued
have filed for bankruptcy
or have trouble paying your bills
Return to " Steps To Take"

Explore Loan Workout Solutions

First and foremost, if you can keep your mortgage current, do so.
However, if you find that you are unable to make your mortgage payments, you may qualify for a loan workout option. Check with your lender to find out which of these options may be available.

If Your Problem Is Temporary - Call Your Lender

Reinstatement: Your lender is always willing to discuss accepting the total amount owed to them in a lump sum by a specific date. They will often combine this option with a Forbearance.

Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time after which another option must be agreed upon to bring your loan current. A forbearance option is often combined with a Reinstatement when you know you will have enough money to bring the account current at a specific time in the future. The money might come from a hiring bonus, investment, insurance settlement, or a tax refund.

Repayment Plan: You may be able to get an agreement to resume making your regular monthly payments, in addition to a portion of the past due payments each month until you are caught up.
If it appears that your situation is long-term or will permanently affect your ability to bring your account current:

Mortgage Modification: If you can make the payments on your loan, but you do not have enough money to bring your account current or you cannot afford the total amount of your current payment, your lender may be able to change one or more terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways:
Adding the missed payments to the existing loan balance.
Changing the interest rate, including making an adjustable rate into a fixed rate.
Extending the number of years you have to repay.

Claim Advance: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor to bring your account current. The repayment of this loan may be delayed for several years.

If Keeping Your Home Is Not An Option -- Call Your Lender
Sale: If you can no longer afford your home, your lender will usually agree to give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to obtain the services of a real estate professional who can aggressively market the property.

Pre-Foreclosure Sale or Short Payoff: If the property's sales value is not enough to pay the loan in full, your lender may be able to accept less than the full amount owed. This option can also include a period of time to allow your real estate agent to market the property and find a qualified buyer. Monetary help may also be available to pay other lien holders and/or help toward paying a few moving costs.

Assumption: A qualified buyer may be allowed to assume your mortgage, even if your original loan documents state that it is non-assumable.

Deed-in-lieu: Your lender may agree to allow you to voluntarily "give back" your property and forgive the debt. Although this option sounds like the easiest way out for you, generally, you must attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. Also, this option may not be available if you have other liens such as judgments of other creditors, second mortgages, and IRS or State Tax liens.
Resources for finding a real estate agent and selling your home

If you need to sell your home, there will be many questions you have to answer. You will need to find how much your house is actually worth, and you will have to find a real estate agent you are comfortable with.

www.hud.gov/offices/hsg/sfh/econ/econ.cfm

• Beware Of Predatory Lending Schemes

See also:
• quitclaim deed
• Find Foreclosure Properties
• Lien
• Tax Lien
• Tax Lien and Tax Deed States
• What is a Lien
• Tax deed sale
• Tax lien sale

• Bankruptcy
• Foreclosure
• Florida foreclosures