Where to find foreclosure assistance
If you are facing foreclosure, it is important to know all of your options. Many foreclosures are caused by job loss, unexpected medical bills, or divorce. These are typically once-in-a-lifetime events; therefore, contacting your mortgage lender and informing them of your situation is vital for your credit, as well as keeping your home. If you are facing any of the financial problems listed above, the following steps may help you avoid losing your home.
• Contact your mortgage lender – If you are having trouble making your mortgage payment, contact your lender immediately. The loss mitigation department will be able to assist you with refinancing, loan modification, or forbearance options. Explain your situation, then follow up with an email or letter that describes in detail what has happened that has caused a financial hardship, and then send documentation to the lender to support your situation.
• Keep your residence: stay at home. Most recent government assistance programs are based on owner-occupied housing. Once you move out of your property, you will lose many of the protections afforded by these recent laws.
• Contact an approved housing counseling agency – Contact the Department of Housing and Urban Development (HUD) and find a HUD-approved advocate to act as a liaison between you and your mortgage lender. The housing counseling agency should be well versed in all government programs that may benefit you. The housing counselor should be knowledgeable about any private or local organizations that may offer assistance. Assistance from a HUD-approved housing counselor must be free.
If after speaking with the housing counseling agency you can decide that your best option, due to your financial situation, is to sell your property to avoid foreclosure; there are other options, including: short sale or deed-in-place. A short sale is when the mortgage holder accepts less than what is owed on the mortgage. This usually happens when the mortgage is greater than the value of the property. It would be necessary to contact an experienced real estate agent who has successfully handled short sales in the past. A deed in lieu is when you voluntarily return your property to the lender. If you choose this route, your credit won’t be damaged as much as if you went through foreclosure; while the benefit to the lender is that they will not have to go through the costs of foreclosing on the property.
In short, the first step in avoiding foreclosure is to contact your mortgage lender and explain your financial difficulties in detail. Send a detailed follow-up email or letter to your lender with supporting documentation of your difficulties. Second, seek help from a HUD-approved housing counseling agency. Thoroughly explain your situation to the HUD-approved counselor and cooperate by providing any requested documentation to support your situation. They should work on your behalf to help you save your home or, at a minimum, help you minimize damage to your credit.