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Tips for Avoiding Foreclosure
Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender or loan servicer asking you to contact them?
Here are some general tips for avoiding foreclosure:
• Don't ignore letters from your lender or loan servicer.
• Contact your lender or loan servicer at the first signs that you might be at risk.
• Contact an independent counseling agency that's been approved by the U.S. Department of Housing and Urban Development (HUD), like the Rhode Island Housing HelpCenter at 401 457-1130.
• Call HUD at 800 569-4287 (TTY 800 877-8339).
• Remember: the earlier you seek out help, the more options you have!
If you are unable to make your mortgage payment there are several steps you can take:
1. Immediately contact your lender or loan servicer. Don’t ignore the problem. Lenders and loan servicers want to help borrowers keep their homes. Foreclosure is expensive for lenders, mortgage insurers and investors. They have options to help borrowers through difficult financial times. These options work best when you are only one or two payments behind, so contact your lender or loan servicer right away. The sooner you seek help, the more options you will have.
2. Open and respond to all mail from your lender or loan servicer.
If you do not contact your lender or loan servicer, they will try to contact you by mail and phone soon after you stop making payments. The first notices you receive will offer good information about foreclosure-prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action.
3. Know your mortgage rights.
Find your loan documents and read them so you know what your lender or loan servicer may do if you can't make your payments. Contact an independent HUD-approved counseling agency, like the Rhode Island Housing HelpCenter, to learn about Rhode Island's foreclosure laws and timeframes.
4. Understand foreclosure-prevention options.
Valuable information about options surrounding foreclosure prevention (also called loss mitigation) can be found online at www.fha.gov/foreclosure/index.cfm.
5. Contact an independent HUD-approved counselor.
HUD funds free or very low-cost housing counseling in Rhode Island and across the country. Housing counselors can help you understand the law and your options, organize your finances, and represent you in negotiations with your lender if you need their help. Find an independent HUD-approved counseling agency, like the Rhode Island Housing Help-Center, or call 800 569-4287 (TTY 800 877-8339).
6. Prioritize your debts.
Prioritize your bills and pay those most necessary for your family – food, utilities, and shelter. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses – cable TV, memberships, entertainment expenses – that you can eliminate.
7. Use your assets.
Do you have assets – a second car, jewelry, a whole life insurance policy – that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Take any responsible action that will save money. Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender or loan servicer that you are willing to make sacrifices to keep your home.
8. Avoid foreclosure prevention companies.
You don't need to 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. While these may be legitimate businesses, they will charge you a hefty fee (often 2-3 months’ mortgage payments) for information and services that your lender, loan servicer or an independent HUD-approved counseling agency will provide for free if you contact them.
9. Don't lose your home to foreclosure recovery scams.
Act cautiously if a firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf. You may well 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 of the terms. Instead, you should seek professional advice from an attorney, a trusted real-estate professional, or an independent HUD-approved counseling agency, like the Rhode Island Housing HelpCenter. You can reach the Rhode Island Housing HelpCenter at 401 457-1130.
Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender or loan servicer asking you to contact them?
Here are some general tips for avoiding foreclosure:
• Don't ignore letters from your lender or loan servicer.
• Contact your lender or loan servicer at the first signs that you might be at risk.
• Contact an independent counseling agency that's been approved by the U.S. Department of Housing and Urban Development (HUD), like the Rhode Island Housing HelpCenter at 401 457-1130.
• Call HUD at 800 569-4287 (TTY 800 877-8339).
• Remember: the earlier you seek out help, the more options you have!
If you are unable to make your mortgage payment there are several steps you can take:
1. Immediately contact your lender or loan servicer. Don’t ignore the problem. Lenders and loan servicers want to help borrowers keep their homes. Foreclosure is expensive for lenders, mortgage insurers and investors. They have options to help borrowers through difficult financial times. These options work best when you are only one or two payments behind, so contact your lender or loan servicer right away. The sooner you seek help, the more options you will have.
2. Open and respond to all mail from your lender or loan servicer.
If you do not contact your lender or loan servicer, they will try to contact you by mail and phone soon after you stop making payments. The first notices you receive will offer good information about foreclosure-prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action.
3. Know your mortgage rights.
Find your loan documents and read them so you know what your lender or loan servicer may do if you can't make your payments. Contact an independent HUD-approved counseling agency, like the Rhode Island Housing HelpCenter, to learn about Rhode Island's foreclosure laws and timeframes.
4. Understand foreclosure-prevention options.
Valuable information about options surrounding foreclosure prevention (also called loss mitigation) can be found online at www.fha.gov/foreclosure/index.cfm.
5. Contact an independent HUD-approved counselor.
HUD funds free or very low-cost housing counseling in Rhode Island and across the country. Housing counselors can help you understand the law and your options, organize your finances, and represent you in negotiations with your lender if you need their help. Find an independent HUD-approved counseling agency, like the Rhode Island Housing Help-Center, or call 800 569-4287 (TTY 800 877-8339).
6. Prioritize your debts.
Prioritize your bills and pay those most necessary for your family – food, utilities, and shelter. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses – cable TV, memberships, entertainment expenses – that you can eliminate.
7. Use your assets.
Do you have assets – a second car, jewelry, a whole life insurance policy – that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Take any responsible action that will save money. Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender or loan servicer that you are willing to make sacrifices to keep your home.
8. Avoid foreclosure prevention companies.
You don't need to 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. While these may be legitimate businesses, they will charge you a hefty fee (often 2-3 months’ mortgage payments) for information and services that your lender, loan servicer or an independent HUD-approved counseling agency will provide for free if you contact them.
9. Don't lose your home to foreclosure recovery scams.
Act cautiously if a firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf. You may well 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 of the terms. Instead, you should seek professional advice from an attorney, a trusted real-estate professional, or an independent HUD-approved counseling agency, like the Rhode Island Housing HelpCenter. You can reach the Rhode Island Housing HelpCenter at 401 457-1130.
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