How to Avoid Foreclosure
 

   All of us, at some point in our lives, experience financial difficulties. They can begin with a medical problem, loss of work, or some other unexpected change in circumstances. At the first sign that making your payment may not be possible is the time to contact your lender to ask for their assistance. Many times a payment can be postponed for a month, or payments can even be lowered for a period of time to help you get through the hardship. Even if you're already receiving late notices or letters requesting that you contact your lender, it's not too late to avoid foreclosure. Communication is key, and a simple phone call explaining your situation can go far in avoiding further action against you, or possible foreclosure.

Here are some simple steps you can take to help you avoid foreclosure:

1. Don't ignore the problem. The further behind you become, the harder and more costly it will be to reinstate your loan and the more likely to lose your home.
2. Contact your lender as soon as you realize that there is a problem. Lenders do not want your house. They have options to help borrowers through difficult financial times.
3. Respond to all mail or telephone messages from your lender. Failure to open mail or respond to messages will make it more difficult for you to avoid foreclosure, and will not be an excuse in foreclosure court.
4. Know your mortgage rights. Find your loan documents and read them so you know what your lender may do if you cannot make your payments. You can learn about the foreclosure laws in your state by contacting the State Government Housing Office.
5. Understand your foreclosure prevention options. Valuable information about foreclosure prevention options can be found on the internet at www. fha.gov/foreclosure/index.cfm.
6. Contact a HUD-approved housing counselor.  The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you by calling 1-800-569-4287 or 1-800-877-8339.
7. Prioritize your spending. After healthcare, keeping your house should be your first priority.  Review your finances to see where you can cut spending. Look for optional expenses such as cable TV, memberships, and entertainment that can be eliminated. Delay payments on credit cards and other unsecured debt until you have paid your mortgage.
8. Use your assets such as a second car, jewelry, a whole life insurance policy, or items you can sell for cash to help reinstate your loan.  Can anyone in your household get an extra job to bring in additional income?  Even if these efforts don't significantly increase your available cash, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies. Don't pay fees for foreclosure prevention help. Use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender for a hefty fee (often two or three months' mortgage payments). These companies offer to provide you information and services your lender or a HUD-approved housing counselor will provide for free if you contact them.
10. Don't lose your house to foreclosure recovery scams! If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may be signing over the title to your property and becoming a renter in your own home!  Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.