Foreclosure Does Not Happen Overnight

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If you at risk of foreclosure and losing your home, you must remember that foreclosure does not happen overnight. Below we have listed some tips and advice to help prevent and/or stop foreclosure on your home.

If you have missed your house payment

1) Do not ignore the problem. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2) Contact your lender as soon as you realize that you have a problem. Lenders do not want your house. They have options to help borrowers through difficult financial times.


3) Open and respond to all mail from your lender. The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4) Know your mortgage rights. Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5) Understand foreclosure prevention options. Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at the Government website www.hud.gov.

6) Contact a HUD-approved housing counselor. The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.


7) Prioritize your spending. After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8) Use your assets. Do you have assets such as a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9) Avoid foreclosure prevention companies. You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

10) Don't lose your house to foreclosure recovery scams! If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.

If you have not missed a house payment yet, but afraid you might

Are these situations happening to you?

1) Has your financial situation changed due to a mortgage payment increase, loss of job, divorce, medical expenses, increase in taxes or other reasons?

2) Is your credit card debt becoming unmanageable?

3) Are you using your credit cards to buy groceries?

4) Is it becoming difficult to pay all your monthly bills on time?

If it’s becoming harder to make your house payment each month, contact a HUD-approved Housing Counselor, or Call Toll Free (800) 569-4287 to find a Housing Counselor near you.

Few people think they will lose their home because they believe they have more time

Here is how a foreclosure happens. Timeline varies by state.

1) First month missed payment: your lender will contact you by letter or phone. A housing counselor can help.

2) Second month missed payment: your lender is likely to begin calling you to discuss why you have not made your payments. It is important that you take their phone calls. Talk to your lender and explain your situation and what you are trying to do to resolve it. At this time, you still may be able to make one payment to prevent yourself from falling three months behind. A housing counselor can help.

3) Third month missed payment: after the third payment is missed, you will receive a letter from you lender stating the amount you are delinquent, and that you have 30 days to bring your mortgage current. This is called a "Demand Letter" or "Notice to Accelerate". If you do not pay the specified amount or make some type of arrangements by the given date, the lender may begin foreclosure proceedings. They are unlikely to accept less than the total due without arrangements being made if you receive this letter. You still have time to work something out with your lender. A housing counselor can still help.

4) Fourth month missed payment: now you are nearing the end of time allowed in your Demand or Notice to Accelerate Letter. When the 30 days ends, if you have not paid the full amount or worked our arrangements you will be referred to your lender's attorneys. You will incur all attorney fees as part of your delinquency. A housing counselor can still help you.

5) Sheriff's or Public Trustee's Sale: the attorney will schedule a Sale. This is the actual day of foreclosure. You may be notified of the date by mail, a notice is taped to your door, and the sale may be advertised in a local paper. The time between the Demand or Notice to Accelerate Letter and the actual Sale varies by state. In some states it can be as quick as 2-3 months. This is not the move-out date, but the end is near. You have until the date of sale to make arrangements with your lender, or pay the total amount owed, including attorney fees.

6) Redemption Period: after the sale date, you may enter a redemption period. You will be notified of your time frame on the same notice that your state uses for your Sheriff's or Public Trustee's Sale.

It is very important to stay in contact with your lender and get assistance as early as possible. All dates are estimated, and vary according to your state and your mortgage company.

You may want to also read Stopping A Foreclosure On A Home

Although all information has been written in good faith and reviewed, please email us at [email protected] to report any inaccuracies.