Avoiding Foreclosure

Avoiding Foreclosure

If you are unable to make your mortgage payment:

Contact a HUD-approved housing counselor. The U.S. Department of Housing and Urban Development offers free or low-cost housing counseling. Counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender. Call 800-569-4287.

Don’t ignore the problem. The further behind you become, the harder it will be to reinstate your loan.

Contact your lender ASAP. Lenders have options to help borrowers through difficult financial times.

Respond to all mail from lender. Your failure to open the mail will not be an excuse in foreclosure court.

Know your mortgage rights. Find your loan documents and read them. Learn about the foreclosure laws and timeframes.

Prioritize your spending. After health care, keeping your house should be your first priority. Review your finances and see where you can cut. Delay payments on credit cards and other unsecured debt.

Use your assets. Sell a second car, jewelry, a whole-life insurance policy for cash to help reinstate your loan or get a second job.

Avoid foreclosure-prevention companies. Many for-profit companies will charge you a hefty fee (often two or three months’ mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.

Source: U.S. Department of Housing and Urban Development