Tips to Avoid Foreclosure

What should I do if I miss a mortgage payment?

Call for help. It's the most important thing you can do to stop foreclosure. More than half of homeowners facing foreclosure did not call for help when they fell behind in their mortgage payments.
Avoid foreclosure rescue scams by calling a reputable nonprofit organization. HOPE for Homeowners, 1-888-995-HOPE, is an independent, third-party resource that is part of a HUD-certified, not-for-profit network dedicated to helping homeowners. HOPE counselors are trained to set up a plan of action designed just for you and your situation.
Notify the bank as soon as you know your payment will be late. Calling when you are 30 or 60 days late is better than calling when you are 120 days late. You still have some options. You must put your pride on hold if you’re truly serious about stopping the foreclosure process. 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?

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: When you are behind in your payments but can promise a lump sum to bring payments current by a specific date.
A Repayment Plan: If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past due amount to each current monthly payment until your account is current.
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 long 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.

How can I reduce the risk of foreclosure when I purchase or refinance my home?

Take advantage of pre-purchase counseling offered by nonprofit organizations. Homeowners can avoid trouble later on by making informed decisions while purchasing their homes. Borrowers who are most likely to keep their homes understand their mortgage options and how much they can really afford. Education also helps borrowers identify and avoid unscrupulous sellers or lenders. Studies show that homeowners who have received high-quality education and counseling are 33 percent less likely to be behind in payments at the 90-days past due mark. Another recent study found that borrowers who received counseling have half the default risk as those who did not.
Free pre-purchase counseling is offered by St. Ambrose Housing Aid Center, through group sessions or individual counseling. Call 410-366-8795, ext 201.
Avoid prepayment penalties and balloon payments.

People who refinance their mortgages with loans containing prepayment penalties or balloon payments are more likely to undergo foreclosure, according to a study by researchers at the University of North Carolina. According to the study, a prepayment penalty increases foreclosure risk by about 20 percent. Mortgages with balloon payments were 46 percent more likely to go to foreclosure than loans without. Protect the equity in your home–it’s a valuable source of wealth that will build over time.
Stay on top of home repairs and maintenance. NeighborWorks organizations, including St. Ambrose, provide counseling in home maintenance and repairs and rehabs that improve the value of a home. Too often emergency repairs and less-than-trustworthy contractors push a homeowner into foreclosure.

Call 1-888-995-HOPE or visit www.995HOPE.org or www.nw.org/foreclosuresolutions.


	Missed a mortgage payment? Don't wait until it's too late. Call for help immediately at 1-888-995-HOPE. Trained professional housing counselors will give you sound advice, contact your lender and connect you with local housing counselors at various Baltimore Homeownership Preservation Coalition member sites. The service is free, confidential, and available 24 hours a day, seven days a week. If you are looking to buy a home, see this information on Help for Homebuyers.	Tips to Avoid Foreclosure What should I do if I miss a mortgage payment? Call for help. It's the most important thing you can do to stop foreclosure. More than half of homeowners facing foreclosure did not call for help when they fell behind in their mortgage payments. Avoid foreclosure rescue scams by calling a reputable nonprofit organization. HOPE for Homeowners, 1-888-995-HOPE, is an independent, third-party resource that is part of a HUD-certified, not-for-profit network dedicated to helping homeowners. HOPE counselors are trained to set up a plan of action designed just for you and your situation. Notify the bank as soon as you know your payment will be late. Calling when you are 30 or 60 days late is better than calling when you are 120 days late. You still have some options. You must put your pride on hold if you’re truly serious about stopping the foreclosure process. 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? 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: When you are behind in your payments but can promise a lump sum to bring payments current by a specific date. A Repayment Plan: If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past due amount to each current monthly payment until your account is current. 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 long 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. How can I reduce the risk of foreclosure when I purchase or refinance my home? Take advantage of pre-purchase counseling offered by nonprofit organizations. Homeowners can avoid trouble later on by making informed decisions while purchasing their homes. Borrowers who are most likely to keep their homes understand their mortgage options and how much they can really afford. Education also helps borrowers identify and avoid unscrupulous sellers or lenders. Studies show that homeowners who have received high-quality education and counseling are 33 percent less likely to be behind in payments at the 90-days past due mark. Another recent study found that borrowers who received counseling have half the default risk as those who did not. Free pre-purchase counseling is offered by St. Ambrose Housing Aid Center, through group sessions or individual counseling. Call 410-366-8795, ext 201. Avoid prepayment penalties and balloon payments. People who refinance their mortgages with loans containing prepayment penalties or balloon payments are more likely to undergo foreclosure, according to a study by researchers at the University of North Carolina. According to the study, a prepayment penalty increases foreclosure risk by about 20 percent. Mortgages with balloon payments were 46 percent more likely to go to foreclosure than loans without. Protect the equity in your home–it’s a valuable source of wealth that will build over time. Stay on top of home repairs and maintenance. NeighborWorks organizations, including St. Ambrose, provide counseling in home maintenance and repairs and rehabs that improve the value of a home. Too often emergency repairs and less-than-trustworthy contractors push a homeowner into foreclosure. Call 1-888-995-HOPE or visit www.995HOPE.org or www.nw.org/foreclosuresolutions.
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