You Can Avoid Foreclosure and Keep Your Home
Losing a home can be financially and personally devastating. Here's information to help you keep your home. Relief may be available.
People facing money problems:
If you are facing unemployment or have money problems, you may be able to keep your home if you know the right steps to take. Read on for important information and links to local organizations that can help you get through difficult times without losing your home. Government organizations and the mortgage industry worked together to provide this information to help you keep your home.
Military personnel and spouses:
If you or your spouse is on active military duty, you may qualify for a reduction in your interest rate resulting in lower payments. Servicemembers Civil Relief Act of 2003 (formerly the Soldiers' and Sailors' Civil Relief Act of 1940) helps with military homeowners.
Facing Money Problems:
Financial problems are most often associated with major life changes like:
- Job loss
- Cuts in work hours or overtime
- Illness, injury, or death of a family member
- Divorce or separation
If your family is facing any of these issues and you can't pay your bills, look closely at what you owe and what you earn. Eliminate unnecessary spending and reach out for help if you still can't make ends meet. Taking action right away can help you protect your family from the loss of your home.
Steps to take when you can't pay your mortgage:
- 1. Contact your FHALoanCorp representative as soon as you have a problem
Many people avoid calling lenders about money troubles because they:
- Feel embarrassed discussing money problems with others
- Believe that if lenders know they are in trouble, they will automatically rush to a collection agency or foreclosure to seize property for failure to pay mortgage debt (this is the last option lenders want)
Lenders want to help borrowers keep their homes because:
- Foreclosure is expensive for lenders, mortgage insurers and investors
- HUD and private mortgage insurance companies and investors like Freddie Mac and Fannie Mae require lenders to work aggressively to help borrowers facing money problems
Lenders have workout options (choices) to help you and:
- These options work best when your loan is only one or two payments behind
- The farther behind you are on your payments, the fewer options are available
Don't assume that your problems will quickly correct themselves:
- Don't lose valuable time being overly optimistic
- Contact your FHALoanCorp representative to discuss your circumstances as soon as you realize that you're unable to make your payments
- Look forward to your lender being willing to explore many possible solutions, without guaranteeing any one particular solution
Contact your lender and tell them you are trying to correct your situation by working with FHALoanCorp.
CALL YOUR FHALoanCorp representative TODAY toll free 888.447.7314! The sooner you call, the sooner our help is available.
Don't ignore mail from your lender
If you don't get in touch with 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 mail and phone calls. If your lender doesn't hear from you, they will have to start legal action leading to foreclosure. This will greatly increase the cost to bring your loan current. Speak with an FHALoanCorp representative to find out how we can help.
Information for families with FHA loans
The FHA provides many alternatives and ways for borrowers to get help. These may include mortgage modifications (changes), special forbearances (allowances), and other actions you can take to avoid foreclosure.
FHALoanCorp works closely with customers who have FHA-insured loans. Do you feel you have nowhere to turn with your questions? Do you need help contacting your lender? The FHALoanCorp is ready to help! Contact us at 888.447.7314.
2. Talk to a housing counselor
If you don't feel comfortable talking with your lender, you should immediately contact an FHALoanCorp representative to help you:
- Review your financial situation and determine what finance options are available to you
- Learn which of the various workout arrangements lenders consider and make the most sense for you and your family, based on your circumstances
- Call your lender and notify them thay you are trying to correct you situation
- Protect you from becoming to far behind on mortgage payments (the sooner you refinance the quicker you can get back on track)
Preserve your good credit
Do not underestimate (misjudge) how important it is to keep your good credit. Your future ability to purchase items, rent or buy a home, and do other things often requires a credit check. Consumer credit agencies and your lender can help you explore solutions to keep your credit rating from getting blemished.
Maintaining good credit is even 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
- You have filed for bankruptcy
- You have trouble paying your bills
3. Explore your options
First and foremost, if you can keep your mortgage current, do so. If it appears that your situation is long-term or will permanently affect your ability to bring your account current - call an FHALoanCorp representative to discuss your options:
- 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 FHALoanCorp representative will help you refinance your home with an FHA lender.
Below are a few typical questions asked by a homeowner when they cannot pay their mortgage.
What happens when I miss my mortgage payments?
Foreclosure may occur. This means your lender can legally repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued, meaning you would not only lose your home, you also would owe your original lender money.
Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if at all possible.
What should I do?
- Do not ignore letters from your lender. If you are having problems making your payments, call or write to your lender's loss mitigation department immediately. Explain your situation. Be prepared to provide financial information, such as you-r monthly income and expenses. Without this information, they may not be able to help.
- Stay in your home for now. You may not qualify for assistance if you abandon your property.
Do I need to keep living in my house to qualify for an FHA loan?
Yes. My employer has already announced layoffs in the coming month. What can I do now? You have started learning about available options here. Now, figure out if a layoff will make it hard for your family to make your mortgage payments. If so, consider other resources you have to pay your mortgage. Review your spending habits and see where you can reduce spending. If you have a lot of other debt, consider contacting each creditor and explaining your situation. Take advantage of any help your employer offers. If you still believe you will have trouble making your mortgage payments, contact FHALoanCorp at 888.447.7314.
What are the key points to remember?
- Don't lose your home and damage your credit history
- Call or write your mortgage lender immediately and be honest about your financial situation
- Stay in your home to make sure you qualify for assistance
- Explore your options toll free at 888.447.7314
- Cooperate with your current lender while we help you
- Explore every alternative to keep your home
- Never sign anything you don't understand.
- Act now. Delaying can't help. If you do nothing, you will lose your home and your good credit rating!
What precautions can I take?
These precautions can help you avoid being "taken" by a scam artist:
- Don't sign any papers you don't fully understand.
- Make sure you get all "promises" in writing.
- Beware of any sales contract that assumes the loan where you are not formally released from liability (responsibility) for your mortgage debt.
- Check with a lawyer or your mortgage company before entering into any deal involving your home.
If you're selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer. You can contact your state's Attorney General, the State Real Estate Commission, or the local District Attorney's Consumer Fraud Unit for this type of information.
Will I be responsible for any out-of-pocket expenses if I am approved for a workout option?
You may have to pay expenses such as recording fees for a loan modification. Because every situation is different, contact your us for more information. But, if a lender has no contact with you and has to start foreclosure, you may have to pay very high legal fees. To avoid this, call your lender as soon as you realize you might have trouble.