Simple Tips For Avoiding Foreclosure

Simple Tips For Avoiding Foreclosure


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Avoid Foreclosure

Foreclosure is a situation in which a homeowner is unable to make mortgage payments as required, which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract.

Step one: communicate with your lender

As soon as you realize that you are going to have trouble making your mortgage payments, contact your lender and tell them about your financial difficulties.  This gives them the opportunity to work with you to create a plan.  Do not stop paying your bills, and do not wait until you cannot make payments before you act.  Though you may feel scared or embarrassed, immediately begin working with your lender to avoid foreclosure on your home.  Learn more about how to talk to your lender about trouble making payments.

Step two: work with the MHA program

You can get help through the Making Home Affordable (MHA) program, which provides free counselors for advice and assistance with keeping you in your home or getting out safely. Visit the MHA website to read about the options and what you’ll need to prepare.

MHA has a hotline you can call anytime: 1-888-995-HOPE (1-888-995-4673) and TTY users should call 1-877-304-9709.  You can also find a counselor in your area.

Your state’s housing agency might have a foreclosure avoidance program as well.

If you have an FHA loan, call the FHA National Servicing Center at 1-877-622-8525.

Beware of mortgage relief scams.  One sign of a scam is when they ask for a fee in advance.  Learn how to spot housing scams and report housing scams.

 

Foreclosure Scams

Dishonest companies or individuals sometimes target homeowners who are struggling to meet their mortgage commitment or are anxious to sell their homes. Scam operators like this promise to help you keep your home or sell your home without having to go into foreclosure, for a fee. However, they rarely deliver on what they promised.

These scam operators find potential victims in several ways:

  • Advertise online and in local publications
  • Distribute flyers
  • Contact people whose homes appear in the foreclosure notices (they can easily find these notices online or in a local newspaper)
  • Target specific religious or ethnic groups

Common Foreclosure Scams

There are several types of foreclosure scams, but some scam activities or offers are common. Be cautious if the company:

  • Offers to negotiate with your lender
  • Advises that they can stop foreclosure by “helping” you file for bankruptcy
  • Asks you to sign over the title to your house to them and make smaller rental payments to them until you can afford to buy the house back later
  • Promises to act as an intermediary between you and your mortgage lender to refinance your loan
  • Instructs you to make payments directly to them instead of the lender
  • Claims that they are affiliated with government mortgage modification programs (keep in mind that legitimate, government approved programs do not charge fees to participate in them)
  • Encourages you to sign fake foreclosure rescue documents
  • Claims that they can perform a forensic mortgage loan audit to help you hold onto your home

File a Complaint

If you need to report a foreclosure scam, you may file a complaint by contacting the Federal Trade Commission (FTC). If the scam involves bankruptcy, contact a local U.S Trustee office. Find reliable foreclosure help through the government’s Making Home Afforable program or find a government certified housing counselor near you.

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