Steps To Avoiding Foreclosure

Steps to Avoiding Foreclosure

1. Talk to a housing counselor
2. Talk to your lender
3. Who to call when a lender won't work with you

1. Talk to a Housing Counselor

HUD sponsors housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.

CCCS OF CENTRAL FL AND THE FL GULF COAST, INC. - TALLAHASSEE BRANCH

Contact Info

1311 Executive Center Drive
Suite 206
(Ellis Bldg. Koger Center)
Tallahassee, Florida 32301

P: 800-741-7040
T: 800-741-7040
F: 407-895-3807
E: cccscounselor@cccsfl.org
W: www.cccsfl.org

COUNSELING SERVICES

• Home Equity Conversion Mortgage Counseling
• Loss Mitigation
• Money Debt Management
• Mortgage Delinquency and Default Resolution Counseling
• Postpurchase Counseling
• Predatory Lending
• Prepurchase Counseling
• Renters Assistance

2. Talk to Your Lender

If you find you are unable to make your mortgage payments, you might qualify for a loan workout option. Check with your lender to see which option may be available. Some options may not apply to your loan if it is not insured by FHA.

If your problem is temporary - call your lender to discuss these possibilities:

1. Reinstatement: Your lender is always willing to discuss accepting the total amount owed in a lump sum by a specific date. Forbearance may accompany this option.
2. Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time and then agree to another option to bring your loan current. A forbearance option is often combined with a reinstatement when you know you will have enough money to bring the account current at a specific time. The money might come from a hiring bonus, investment, insurance settlement, or tax refund.
3. Repayment plan: You may be able to get an agreement to resume making your regular monthly payments, plus 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 - call your lender to discuss options:

1. Mortgage modification: If you can make payments on your loan, but don't have enough money to bring your account current or you can't afford your current payment, your lender may be able to change the terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways:
   1. Adding the missed payments to the existing loan balance.
   2. Changing the interest rate, including making an adjustable rate into a fixed rate.
   3. Extending the number of years you have to repay.
2. Partial Claim: If your mortgage is insured, your lender might help you get a one-time interest-free loan from your mortgage guarantor to bring your account current. You may be allowed to wait several years before repaying this loan. You qualify for an FHA partial claim if:
   1. Your loan is between 4 and 12 months delinquent.
   2. You are able to begin making full mortgage payments again.

 When your lender files a partial claim, HUD will pay your lender the amount necessary to bring your mortgage current. You must sign a promissory note, and a lien will be placed on your property until the promissory note is paid in full.

 The promissory note is interest-free and is due when you pay off the first mortgage or when you sell the property.

3. Who To Call When Your lender Won't Work With You

• (888) 995-HOPE - foreclosure prevention counseling
• HUD-approved housing counseling agencies - counseling on buying, renting, defaults, foreclosures, credit issues, and reverse mortgages
• Florida DFS Consumer Helpline - call (800) 342-2762 before you pay anyone who offers to help you get out of foreclosure
• Veterans Affairs Regional Loan Center - assistance for veterans with a delinquent VA mortgage
• Florida statutes - Florida laws governing foreclosure of mortgages are found in Title XL
• Florida Department of Financial Services - licenses and regulates financial institutions
• Financial planning resources
• Legal assistance

Until Next Time,

Sarah Barnett, Buyers Specialist

Sources:

http://www.hud.gov/foreclosure/