How to Get Help Before Foreclosure

Your financial situation may be a nightmare, but don't lose your home if you can help it. Before things reach the desperate level of foreclosure, there are action you can take. Foreclosure is not inevitable. Try these steps.

Difficulty: Moderate

Instructions

Things You'll Need:

• phone
• phonebook
• the time and will to work on saving your home

1. 
    

   Don't fall 90 days behind on the house payments. That's typically the amount past due that triggers a foreclosure action. Cut corners elsewhere in your finances, but scrape together the mortgage payment to keep a roof over your head.

2. Try figuring out your expenses and income so you'll have an idea what you could afford to pay. It helps if you've done some financial planning before talking to lenders or counselors.

3. If the lender tries to contact you by phone or letter, don't ignore it. Communication, even though painful, is crucial to getting the help you need to save the house. Call them back and try to work out a way to save the situation.

4. 
    

   If they don't call, then you need to contact your mortgage company/bank/lender to try working out payments that you can meet. Sometimes they don't return your calls or seem reluctant to deal with you. It may be you aren't at the worst-case-scenario yet or their loan department may just be overwhelmed by the current mortgage crisis. Don't give up.

5. 
    

   Work with a housing counselor. This should be a non-profit agency. Find one that is government approved at www.hud.gov/foreclosure/index.cfm It should be free.
   You can also call the Homeownership Preservation Foundation. They have a hotline [phone]) according to the Orlando Sentinel Newspaper.

6. 
    

   The housing counselor will have an understanding of foreclosure laws. They know how to reach the right person at your lender and work with them to help you. The housing counselor will give you different options to save the situation (budgeting, modifying the existing loan, etc.).

7. 
    

   Look for state agencies that might help you. Search in the yellow pages under government and housing.

8. I recently saw a way to postpone a foreclosure. Ask the bank to show you the original mortgage paperwork. Since many mortgages are sold and resold, sometimes the original note that you signed may be lost, destroyed or stored somewhere that makes retrieval difficult. The delay created (by asking for the original paperwork with signatures) gives the homeowner time to come up with the money needed or to renegotiate with the mortgage holder. (from an Associated Press article by Mitch Stacy)

Tips & Warnings

• Take action before becoming 90 days delinquent. Once the foreclosure process starts, it is harder to stop it.
• If you walk away from your mortgage, it keeps you from getting another one for years.
• Don't pay money to anyone except your lender or a foreclosure attorney (advice from Freddie Mac)
• Don't despair even if you receive notice that they are working to repossess your home. Banks don't want to be stuck with lots of property and you still need to try negotiating payments.

Resources

• Find a housing counselor
• National Foundation for Credit Counseling
• Freddie Mac

[vallain]

on 5/23/2008 Here's a comment I received from someone who wished to remain anonymous: "I'd imagine most would not want to post a comment next to this article as it indicates a personal failure and who wants to be identified with that??? LOL...I myself rated the article 5 stars and preferred to send my comment privately...good write...only wish I could say I was less than 90 days past due...an unfortunate situation, but, moving forward and focusing on next steps instead of despair has to be the goal at this point. I also found one of the in-article ads useful regarding consolidation on student loans! ;) Have a super day!"

[amylaine]

on 5/22/2008 Great info.