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Default: Any breach of the mortgage contract can constitute default {for example, failure to maintain the property or carry adequate insurance). Commonly default occurs when the homeowner fails to make their monthly payments. It is important to read and understand your mortgage contract to determine what your lender regards as default.
Foreclosure: The process by which the lender takes back and sells the property.
Forbearance: The period of time during which foreclosure proceedings are stalled while
Possible solutions are being fulfilled.
Hot Tip
- Don't lose your home and damage your credit history if you can help it.
- Call or write your mortgage lender immediately.
- Stay in your home to make sure you qualify for assistance.
- Arrange an appointment with an approved housing counselor to explore your options. 5. Beware of scams.
- Explore every alternative available to you.
- Do not sign anything you don't understand.
- Act now
- Check with your mortgage company or lawyer before entering into any agreements involving your home.
- DO NOT GIVE UP!
RESOURCES ARE AVAILABLE TO ASSIST YOU
How to Prevent Foreclosure on Your Home
If you are having trouble making your monthly payments, you may be able to protect your home, but you must act immediately. Your action may prevent the loss of your home through foreclosure. If you are in serious financial difficulty, you should seek professional assistance and/or legal counsel to best protect your investment and your home.
- Contact your lender
Mortgage lenders are not in the business to foreclose on property. They want to work with you and help find a way to keep your home. The longer you wait, the more difficult this will be to do. DO NOT AVOID YOUR MORTGAGE LENDER!! If you are three months behind in your mortgage payments and the lender has not heard from you, they will be justified in pursuing foreclosure.
- Contact an Approved Housing Counseling Agency
An approved housing counseling agency has information on services and programs that could be of help to you. The housing counseling agency may also offer credit counseling. These services are usually free of charge. You may also contact www.BorrowSmart.org for additional services that are available.
- Stay in your home
Stay in your home for now. You may not qualify for assistance if your abandon your property.
- Know your options
Each mortgage lender has options. Some options may include but are not limited to: Special forbearance, Mortgage modification, Partial claim, Pre-foreclosure sale, Deed in lieu of foreclosure. An approved housing counseling agency can, help you determine which, if any, of these options may meet your needs. You should also discuss the situation with your lender.
Buyer Beware
Phony counseling agencies. Some groups calling themselves "c6u~seling agencies" may
approach you and offer to perform certain services for a fee. These could well be services you can do yourself, without cost, such as negotiating a new payment plan with your lender, or
pursuing a pre-foreclosure sale. If you have any doubt about paying for such services call an
approved housing counseling agency. Please call an approved housing counse1ing agency
before you pay anyone or sign Anything.
Equity skimming. In this type of scam, a "buyer" approaches you, offering to get you out of financial trouble by promising to payoff your mortgage or give you a sum of money when the property is sold. The "buyer" may suggest you move quickly and deed the property to him or her. The "buyer" then collects rent for a time, does not make any mortgage payments, and allows the lender to foreclose. Remember that signing over your deed to someone else does not necessary relieve you of your obligation on your loan.
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