Avoid the Foreclosure Pot Hole ”It's a Big One!"

Many homeowners find themselves in situations where they are unable to make their mortgage payments and are in very real danger of losing their homes to foreclosure. If you can't make your next mortgage payment, or if you are already behind, you need immediate help. The Homeownership Preservation Foundation has joined forces with mortgage lenders, nonprofit organizations, and city governments to provide homeowners with free assistance and resources to help you get back on track. Visit the Hope for Homeowners website at www.995hope.com, or call the homeownership hotline at 888-995-HOPE (4673) for immediate assistance.

What Should I Do If I Miss a Payment?

Asking for help is the most important factor in preventing foreclosures.

Notify the bank as soon as you know your payment will be late. Calling when you are one or two months late is better than calling when you are four months behind in payments. Remember that foreclosure is not in the best interest of lenders. Lenders report that it costs up to $50,000 or almost half the loan balance each time they write off a foreclosure.

Work it out. Depending on the situation, the lender may lower the interest rate, lower the borrower's monthly payment, or enter into a repayment agreement for missed payments.

What Are My Options If I Cannot Make Payments?

Your mortgage lender may be willing to work with you to resolve the problem. In one way or another you will need to resolve the mortgage; it's in the best interest of both your lender and yourself to resolve the issue without forcing you into personal bankruptcy. Some options include:

• Forbearance You are allowed to delay payments for a short period, with the understanding that another option will be used afterwards to bring the account current.
• Reinstatement Although you are behind in your payments, you can promise a lump sum to bring payments current by a specific date.
• Repayment PlanIf your account is past due but you can now make payments, the lender mayagree to let you catch up by adding a portion of the past due amount to each current monthly payment until the amount owed before is paid off.
• Modifying Your Mortgage The lender can modify your mortgage to extend the length of your loan (or take other steps to reduce your payments). One solution is to add the past due amount into your existing loan financing it over a longer term.
• Selling Your Home If catching up on payments is not possible, the lender might agree to put foreclosure on hold to give you some time to attempt to sell your home.
• Property Give-Back The lender can allow you to give-back your property and then forgive the debt. Give-backs do, however, have a negative impact on your credit record, although not as much as a foreclosure. The lender might require that you attempt to sell the house for a specific time period before agreeing to this option, and it might not be possible if there are other liens against the home. This option is also called a “deed-in-lieu.