Kathy Ohanians, Real Estate Expert

Getting Behind the Eight Ball?
Many factors can make it hard for you to pay your bills. These factors could include:

Loss of job
Cuts in work hours or overtime
Retirement
Illness, injury, or death of a family member
Divorce or separation

If your family has money troubles, now is the time to look closely at what you owe and what you earn, eliminating unnecessary spending and reaching out for foreclosure help if you still can't meet your financial obligations. Taking action now can help you protect your family from the loss of your home. This page was created to help you find foreclousre free advice, information, avoid foreclosure loan options and web links that will help you protect your home for the years ahead.

Steps to take when you can’t make your mortgage payments:

Contact Your Lender NOW!
Prioritize your Debts
Explore Loan Workout Solutions
Options to keep your home
Other options
Beware of Predatory Lending Schemes

Contact Your Lender Now

Information For Families With FHA Loans

http://www.hud.gov/offices/hsg/sfh/owning.cfm

This information is brought to you through the collaborative efforts of HUD/FHA HUD foreclosure for free, Department of Veterans Affairs, Department of Labor, Fannie Mae, Freddie Mac, members of the mortgage industry-at-large, and other industry participants.

Contact Your Lender As Soon As You Have A Problem

Many people often avoid calling their lenders when they have money troubles. Most of us are embarrassed to discuss money problems with others or believe that if lenders know we are in trouble they will rush to collection or foreclosure.

It is important to know that most lenders want to help borrowers keep their homes. Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems.

Lenders have workout options to help you keep your home. However, these options work best when your foreclosure loan is only due for one or two payments behind. The longer you are behind the fewer options are available.

You should contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.

Do not assume that your problems will quickly correct themselves. Don't lose valuable time by being overly optimistic.

Information To Have Ready When You Call:

Your monthly mortgage billing statement
Your payment coupon book
Your loan account number
A brief explanation of your circumstances

Recent income documents (such as Pay stubs; Benefit Statements from Social Security, Disability, Unemployment, Retirement, or Public Assistance. If you are Self-Employed, have your tax returns or a Year-to-date Profit and Loss Statement available for reference)

List of household expenses

Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for a program, you must complete the forms and return them to your lender quickly. The completed package will be reviewed before the lender talks about a solution with you.

Call Today! The sooner you call; the sooner help is available.

Do not ignore mail from your lender

If you do not contact your lender, your lender will try to contact you by mail and phone soon after you stop making payments. It is very important that you respond to the mail and the phone calls offering help. If your lender does not hear from you they will be required to start legal action that will substantially increase the cost of bringing your foreclosure loan current.

Prioritize your Debts

For the unemployed, getting by will require a new, tightened budget. Prioritize your bills and pay those most necessary for your family: food, utilities and shelter.

Failing to pay any of your debts can seriously affect your credit rating. However, if you stop making your mortgage payments you could lose your house. Whenever possible, any income available after paying for food and utilities should be used to pay your monthly mortgage payments. If your employment income has been stopped or reduced, first consider eliminating or reducing your other expenses (such as dining out, entertainment, cable, second automobile, or even telephone services). Take any responsible action that will save cash.

If that does not provide sufficient income, consider using other available financial resources including:

          Selling assets
          Savings
          401k
          Life insurance

In addition to speaking with your lender, you may want to contact a non-profit consumer credit counseling agency that specializes in providing help in restructuring credit payments. Credit counselors can often reduce your monthly bills by negotiating reduced payments or long-term payment plans with your creditors. The majority of counseling agencies are reputable and provide their services free of charge or for a small monthly administrative fee tied to a repayment plan. Beware of counseling agencies that offer counseling for a large upfront fee or donation.

For consumer debt advice contact the National Foundation for Credit Counseling:

http://www.debtadvice.org

To find a HUD-approved housing counseling agency: http://www.hud.gov/offices/hsg/sfh/hcc/hcc_home.cfm

When you call a consumer credit counseling agency, you will be asked to provide current information on your income and expenses. Make sure you ask what the agency will charge before you sign any documents!

The Importance of good credit

Do not underestimate the importance of preserving your good credit. Maintaining good credit is important for job hunters. When you apply for a job, the employer probably will check your credit report to determine:

whether you have been sued

have filed for bankruptcy

or have trouble paying your bills

Your future ability to purchase certain items, rent or buy a home, and complete other transactions often requires a credit check. Consumer credit agencies and your lender can help you explore solutions to keep your credit from getting blemished.

Explore foreclousre loan workout solutions

First and foremost, if you can keep your mortgage current, do so. If, however, you find that you are unable to find the resources to do this, there may be a program available to fit your particular situation. Check with your lender to find out which of these options may be available.

Options to keep your home

If your situation appears to be temporary:

Reinstatement: Your lender is always willing to discuss accepting the total amount owed to them in a lump sum by a specific date. They most often will combine this option with a Forbearance.

Forbearance: Your lender may allow you to arrange for a reduction or suspension of payments for a short period of time after which another option must be agreed upon to bring your loan current. This option is most appropriate to combine with a Reinstatement when you know you will have a source of funds to bring the account current by a certain date. Such sources of funds might include receiving a hiring bonus, investment distribution or sale, or insurance settlement/reimbursement.

Repayment Plan: You may be able to work an agreement where you would resume making your regular monthly payments, in addition to a portion of the past due payments each month until you are caught up.

If it appears that your situation is long-term or will permanently affect your ability to bring your account current:

Mortgage Modification: If you can make your payments on your loan, but you do not have enough money to bring your account current or you cannot afford the total amount of your current payment, your lender may be able to change one or more terms of your original loan to make the payments more affordable. Your loan could be modified by one or more of the following ways:

Adding the missed payments to the existing loan balance

Changing the interest rate, including making an adjustable rate into a fixed rate.

Extending the mortgage loan term.

Claim Advance: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor to bring your account current. The repayment of this loan may be deferrable for several years.

If keeping your home is not an option

Sale: If you can no longer afford your home your lender will usually agree to give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to obtain the services of a real estate professional who can aggressively and successfully market the property in the short timeframe allowed to find a qualified buyer.

Pre-Foreclosure Sale or Short Payoff: If the property's sales value is not sufficient to pay the loan in full, your lender may be able to accept less than the full amount owed as settlement for the account. This option can also include a period of time to allow your real estate agent to market the property and find a qualified purchaser. Monetary assistance may be available to satisfy additional lien holders and/or help toward paying a few moving costs.

Assumption: A qualified buyer may be allowed to assume your mortgage, even if your original loan documents state that it is non-assumable.

Deed-in-lieu: Your lender may agree to allow you to voluntarily "give back" your property as for settlement for the debt. Although this option sounds like the easiest way out for you, you must usually attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. In addition, the lender will require that their foreclosure loan is the only lien against the property. The lender will check for other liens such as recorded judgments of other creditors, second mortgages, and IRS or State Tax liens.

Other Options

Resources for finding a real estate agent and selling your home

http://www.hud.gov/selling/index.cfm

www.defaultreferrals.com

www.erealty.com

Disaster Relief Options

If your property has been damaged due to a Natural Disaster, if you have been called up for active military duty or you have been affected by a national tragedy, such as the terrorist acts of September 11, 2001, there may be additional assistance available.

For additional information you may wish to view these links:

Victims of a declared Natural Disaster area http://www.hud.gov/offices/hsg/sfh/owning.cfm

Called back to Active Military Duty: Questions & Answers for reservists, guardsmen and other military personnel regarding The Soldiers' and Sailor's Civil Relief Act of 1940

http://www.hud.gov:80/offices/hsg/sfh/faqs/qasscra1.cfm

HUD has a toll-free number for servicemen and women with questions concerning their mortgage. For more information, call 1-888-297-8685 between the hours of 7 a.m. and 7 p.m. Central Standard Time on weekdays.

Events of September 11, 2001- Disaster Recovery

http://www.hud.gov:80/offices/hsg/sfh/faqs/qaho01-21.cfm

http://www.hud.gov/offices/hsg/sfh/owning.cfm

Beware Of Predatory Lending Schemes

Most mortgage lenders are reputable and provide a valuable service by allowing families to own a home without saving the thousands or hundreds of thousands of dollars necessary to buy it outright. However, a few, unscrupulous lenders, especially those who make high risk second mortgages, engage in predatory lending practices that can increase the likelihood that a borrower will lose his or her home to foreclosure. These abusive practices include making a mortgage loan to an individual who does not have the income to repay it, charging excessive interest, points and fees or repeatedly refinancing a foreclosure loan without providing any real value to the borrower.

Borrowers facing unemployment and/or foreclosure are frequent targets of predatory lenders because they are desperate to find any "solution" to their default.

Homeowners frequently receive refinance offers in the mail telling them that they have been "pre-approved" for credit based on the equity in their home. When you are wondering how you are going to pay your mortgage and other bills, it may appear very attractive to borrow against your house. But consider this, if you cannot make your current payments, increasing your debt, even if you get a temporary inflow of cash, will make it harder to keep your home.

Remember these helpful hints:

Explore every reasonable alternative to avoid losing your home but beware of scams.

For example, watch out for:

Equity skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out.

Phony counseling agencies: offer counseling for a fee when it is often given at no charge.

Do not sign anything you do not understand. It is your right and duty to ask questions.

Information is your best defense against becoming a victim of predatory lending especially for a desperate homeowner!

For more information about Predatory Lending go to: http://www.hud.gov/offices/hsg/pred/predlend.cfm

http://www.freddiemac.com/homebuyers/bank/pred_lending.html

http://www.dontborrowtrouble.com

Kathy Ohanians, your realtor for Glendale CA real estate, Burbank CA real estate. Search this site for Burbank home for sale, Burbank realtor, Glendale realtor, Glendale new home, Glendale properties, Burbank home search, and Burbank properties.