How to Talk to a Housing Counselor to Prevent Foreclosure

If you've been ignoring calls and letters from your mortgage lender and fear home foreclosure is around the corner, it might be time to talk to a housing counselor. There are various agencies, such as the department of Housing and Urban Development, that sponsor housing counseling agencies nationwide. A counselor can give you free or inexpensive advice about the law and your options for dealing with your lender.

Difficulty: Moderate

Instructions

1. Contact your lender. Ignoring their attempts to reach you won't make the problem go away. Tell the lender that you are or are about to become late on your payments, and why. Get the names of the people you talk to when you call and write a follow-up letter for the lender's file (keep one for your records).

2. Search for a HUD-approved housing counselor in the phone book or on the Internet (see Resources). Common agencies are Consumer Credit Counseling Service and NeighborWorks, which have offices nationwide.

3. Gather your financial records. Ideally, you should make a list of the major bills you pay, such as your mortgage, auto loans and credit cards. Have statements for checking, savings and investment accounts on hand.

4. Make the call. A counselor will ask about your situation; honesty is the best policy. The more the counselor knows, the more equipped he will be to come up with a solution. After reviewing your income, assets and expenditures, he will work with you to establish a plan of action to bring your mortgage current.

Tips & Warnings

• Remember that although housing counselors have relationships with many lenders, they cannot force a mortgage company to work with you.
• Beware of foreclosure "rescue" scams, such as promises to buy your home for cash. Read up on foreclosure-mediation services so you know what to look for (see Resources).