Contact your lender or servicer immediately if you’re having trouble paying your mortgage or you have received a foreclosure notice. You may be able to negotiate a new repayment schedule. Lenders generally don’t want to foreclose; it costs them money.
Contact a credit counselor through the Homeownership Preservation Foundation (HPF), a nonprofit organization that operates a national 24/7 toll-free hotline (1.888.995.HOPE) with free, bilingual, personalized assistance to help homeowners avoid foreclosure. HPF is a member of the HOPE NOW Alliance of mortgage servicers, mortgage market participants and counselors. More information about HOPE NOW is at www.995hope.org. Specifically, you should reach out to one of the wonderful nonprofit agencies that provides housing counseling at low or no cost. Click here for a list of housing counselors nationwide. You can search within your state.
Any and all communications from your lender
Foreclosure notices and/or court or sheriff's sale complaints
Your two most recent mortgage statements
Your homeowner's insurance policy if your pay this directly
Two months worth of pay-stubs
Two most recent tax returns for everyone listed on the mortgage
All bank account statements for the previous two 2 months
Proof of any other income (child support, alimony, SSI, disability, rental income, etc.)
It may not be possible to restructure your loan or reduce your payments. It is possible to get creative and think outside of the box. Can you work an extra shift for a season at work? Can you pick up extra money with a hobby or a talent by tutoring? Can you rent a room to someone who needs a place to stay? Can you downsize to a single vehicle? If raising your income is impossible, perhaps you need to explore the possiblity of a short sale with your lender.
FHA-Insured Mortgages
According to CNN, increasingly, FHA-insured loans are falling into foreclosure or serious delinquency, moving in the opposite direction ofloans guaranteed by Fannie Mae and Freddie Mac or those held by banks,which are all showing signs of improvement. Last year in 2012, the share of government-guaranteed loans, a majority of which are backed by FHA, that were 90 days or more delinquent soared nearly 27% during the year ending March 31.Foreclosures jumped nearly 17%, according to a report published recently by federal regulators. The Office of the Comptroller of the Currency said FHA has also had a tougher time successfully modifying loans. More than 48% of government-guaranteed mortgages re-defaulted 12 months after modification, compared to 36.2% of loans overall.
Help is available for homeowners facing foreclosure that have mortgages backed by FHA. The Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD), is working aggressively to halt and reverse the losses represented by foreclosure. Through its National Servicing Center (NSC), FHA offers a number of various loss mitigation programs and informational resources to assist FHA-insured homeowners and home equity conversion mortgage (HECM) borrowers facing financial hardship or unemployment and whose mortgage is either in default or at risk of default.
CONTACT FHA
FHA staff are available to help answer your questions and assist you to better understand your options as an FHA borrower under these loss mitigation programs. There are several ways you can contact FHA for more information, including:
With the rise of foreclosures, sellers are facing a rise in mortgage relief scams. Sellers should be very cautious in proceeding with mortgage relief.
The Mortgage Assistance Relief Services (MARS) Rule makes it illegal for companies to collect any fees until a homeowner has actually received an offer of relief from his or her lender and accepted it. That means even if you agree to have a company help you, you don't have to pay until it gets you the result you want.
The Federal Trade Commission has a myriad of help for homeowners who are facing foreclosure here. I have worked in real estate since 1992, and I've seen a lot of mortgage lenders come and go. Thankfully, those who are not ethical generally do not last long. Unfortunately, for those they affect while they are in business, they can really make selling your property a hassle. I can direct you to local, ethical lenders and attorneys that can help you through the difficult process of foreclosure.
According to the FTC, you can save yourself money and more heartache by avoiding any business that:
Don't fall prey to mortgage relief scams! Arm yourself with information and ethical advice early in the process - preferrably before you have fallen behind in your payments. Be proactive in the process. You can minimize the damage, and perhaps even save your home if you take key steps early on. Let me help you by directing you to people who can help - not who will prey on your situation.
