The word foreclosure is enough to make most homeowners shudder. It is a scary prospect that leads many people who are behind on payments to stop reading the mail and answering the phone in hopes that it will go away. Foreclosure has no real winner except for maybe investors who buy cheap foreclosed homes at an auction. The lender loses money and the homeowner is left with massive bills and damaged credit. Purchasing another home will be more costly and difficult no matter how much damage control you do. Avoid all this by acting now.
Due to the bursting housing bubble and financial institutions experiencing record high foreclosures, it can be difficult to refinance a mortgage due to financial hardship or because of increased payments as a result of an adjustable rate mortgage. For the last several years, loans were relatively easy to come by. People were getting loans they could not afford or complicated adjustable mortgages with a lot of small print that they did not understand or plan for. As usual in life, everything comes out in the wash.
Many of us are left in a situation where refinancing or selling our homes is not always an available option due to tightened loan standards and declining home sales. Where do you turn when you can no longer afford your home but cannot sell it due to decreasing home values? What do you do when banks and financial institutions shut off the spigot to anyone with even minor credit issues? Lucky for all of us there are many options available and many organizations that want to set you up with a counselor. Foreclosure counselors can do more for you than you may think.
In this article we will explore the resources offered by counselors and organizations throughout the United States . We will suggest questions that you may want to pose to assist you in getting as much benefit as possible out of your counseling. The Internet is a great resource to research all aspects of foreclosure so you are well prepared to turn this thing around.
Everyone at some point in their life faces financial difficulties that are large enough to make them want to stick their head in the sand. Our mortgages are too big and important to ignore. Even if you have been ignoring the mail and the phone calls up until now it is time to face the music. It is intimidating to call your lender when you are so far behind that you can’t see a way out but that is where a counselor can come in and assist you. These counselors not only help you speak to your lender but they can aid you in setting a budget, employment training and even financial help.
With the current declining housing market, homeowners are in a strong bargaining position. Many of the banks and financial institutions are facing millions of defaulted loans and, in turn, millions of homes that they must maintain and sell. In this market selling a home is not always simple. They do not want to own your home. They want to keep you in your loan. This gives counselors room to negotiate with your lender to get you caught up and stop foreclosure in its tracks.
This is a good time in our discussion to warn homeowners about “for profit” foreclosure rescue schemes. There are plenty of non profits ready to help so there is no need to get involved with people looking to profit from your problem and make money off of your home. Research any organization online before you deal with them.
One organization that homeowners in foreclosure or in danger of entering foreclosure can contact is NeighborWorks. Visit www.nw.org and find a counselor in your area. This organization’s sole purpose is to keep neighborhoods strong. One of the ways they accomplish this goal is to provide homeowners counseling to keep them in their home. They do this by connecting homeowners with counselors who can speak to lenders for them and even providing financial support.
Another option is Housing Help Now. You can reach them at www.housinghelpnow.org to make an appointment. They will help you wade through and understand all the options available to you. This organization is determined to bring homeowners that have been caught up in the unsustainable bubble back into reality where real problems can be solved. The sooner you reach out for help the more options that will likely be available to you.
The Department of Housing and Urban Development or HUD also offers free services designed to keep you in your home. You can find a counselor in your area by calling 800-569-4287 or visit the website at www.hud.gov/foreclosure/index.cfm.
This government office can offer valuable information on all of the newest and latest government efforts to help homeowners avoid foreclosure. Some of the options that may be available to you are:
Forbearance or reduced monthly payments (short term)
Working with the lender to allow the homeowner to repay arrears over time while maintaining their current mortgage payment
For homeowners whose situation is such that they must get out of the home there is a program through Freddie Mac or Fannie Mae to help mitigate the loss to the homeowner and the lender. This is a perfect example of an option that most people have never heard of or thought was available to them. Your HUD counselor can tell you if you qualify to take advantage of this program.
Which option is right for you? It all depends on your current situation and your current and future financial picture. Your counselor will help you weigh out all these factors to match you with your best alternative.
Once you have found a counselor near you prepare a list of documents and questions to bring with you to your appointment. Your document list should include:
Any and all of your original mortgage/loan paperwork
Any 2 nd mortgage information
Current W2s and last years taxes
Bring proof of all your monthly bills or prepare a list
Past due notices and contact information for your lender
There are some questions you should be prepared to ask your counselor at your first appointment. They are here to help you so you should speak up and get all you can out of your time with them.
What options are typically offered by lenders?
Do they offer budget assistance?
Will they assist you in credit cleanup if needed?
Will they be the main source of communication with the lender?
What is expected of you every step of the way?
Chances are, any good nonprofit organization will answer these questions on their website or in person before you have a chance to ask but don’t leave without the answers. When you are presented with options to catch up on your loan or to refinance be sure you are fully informed of every inch of the agreement. The hope here is to avoid problems in the future. Your counselor should be familiar with your financial situation to help you choose the option that will work best for you. You need to be very honest about your finances so they have all the information they need to help you.
If you are not yet in foreclosure but things are getting tight, you can also look into a nonprofit consumer credit counseling organization. They can help you stave off financial problems before they lead to an overwhelming situation. They can assist you in negotiating with credit cards to lower your payments and give you a chance to get caught up.
Consumer Credit Counseling Service is one of the most reputable organizations available. This is yet another area where you need to be on the lookout for the private for profit outfits. Why pay when you can get the help for free or for a small donation. You can find an office near you in the Yellow Pages or on www.cccsatl.org. Reaching out to them before foreclosure is looming can save you a world of trouble. They offer valuable information for all consumers on their website to ensure we are all making the right financial decisions for our future.
You have many options available to you. The threat of foreclosure is scary but it does not have to be. When you have experts on your side, you will feel more in control of your future. Your home is likely the biggest purchase you will ever make and it is worth saving. Some homeowners can improve their situation even in the short term until they can sell their property. There is really no end to the options you can work out but it all depends on you. Reach out and utilize all the wonderful alternatives to foreclosure by working with a knowledgeable counselor that is looking out for you.
Your future is worth the investment and there are countless people and organizations that are on your side. It is worth the fight now to make a better future for you and your family. Avoiding foreclosure through any and all means possible is the best choice you will ever make.