Tips for Avoiding Foreclosure

Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

Don’t ignore the problem.

Open and respond to all mail from your lender. The further behind you become, the fewer options you have and the more likely that you will lose your house. Learn your options and take action as soon as possible.

Contact your lender as soon as you realize that you have a problem.

Lenders do not want your house. Even before you miss a payment you can contact them. You may be able to negotiate a financial hardship plan to help you through the difficult financial times.

Understand foreclosure prevention options.

Information about what options you have once you have received a foreclosure notice can be found in our Learning Center.

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.

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.

Try raising some quick cash that you can put towards your payment.

Do you have assets such as a second car, jewelry, or 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.

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.

Don’t lose your house to foreclosure recovery scams!

Don’t let a counselor pressure you to sign paperwork you haven’t had a chance to read through carefully or that you don’t understand. 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 or a trusted real estate professional.