The guidance below is applicable to homeowners with FHA Insured loans to stop bank foreclosure. While a good deal of this information may apply to all homeowners interested to stop foreclosure, not all of the foreclosure aid avoidance tools mentioned, such as deed in lieu of foreclosure and short selling, may be available to you if you have a VA or conventional loan. Additionally, HUD/FHA does not have any Loss Mitigation oversight over VA or conventional loans. Please contact your lender or a housing counseling agency.
Missing Mortgage Payments: What to do next?
Responding to Lenders for Missed Payments and Foreclosure Warnings?
What are alternatives to filing foreclosure?
Determining Qualifications for Foreclosure Aid Programs
Foreclosure Scams to be Aware of
Are you looking for an Alternative to Filing Foreclosure? An Attorney fully understands the complex laws surrounding Foreclosure processes and may be able to help prevent or delay a Foreclosure proceeding. Submit your case for free to a Qualified Attorney in your area.
Foreclosure may occur. This is the legal means that your lender can use to repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued. If that happens, you not only lose your home, you also would owe HUD an additional amount. Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future.
DO NOT IGNORE THE LETTERS FROM YOUR LENDER. If you are having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help. Stay in your home for now. You may not qualify for assistance if you abandon your property. For HUD foreclosure help contact a HUD-approved housing counseling agency. Call (800) 569-4287 or TDD (800) 877-8339 for the housing counseling agency nearest you. These agencies are valuable resources. They frequently have information on services and programs offered by Government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.
You may be considered for the following:
Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses. You must furnish information to your lender to show that you would be able to meet the requirements of the new payment plan.
You may be able to refinance the debt and/or extend the term of your mortgage loan through a mortgage modification. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem and can afford the new payment amount.
Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current. You may qualify if:
When your lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay your lender the amount necessary to bring your mortgage current. You must execute a Promissory Note, and a Lien will be placed on your property until the Promissory Note is paid in full.The Promissory Note is interest-free and is due when you pay off the first mortgage or when you sell the property.
This will allow you to avoid foreclosure by selling your property for an amount less than the amount necessary to pay off your mortgage loan. You may qualify if:
As a last resort, you may be able to voluntarily "give back" your property to the lender. This won't save your house, but it is not as damaging to your credit rating as a foreclosure. You can qualify if:
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Foreclosure Law
Your lender will determine if you qualify for any of the alternatives. A housing counseling agency can also help you determine which, if any, of these options may meet your needs and also assist you foreclosure assistance in communicating with your lender. Call (800) 569-4287 or TDD (800) 877-8339.
Beware of scams to stop foreclosure fast! Solutions that sound too simple or too good to be true to stop morgage forclosure usually are. If you're selling your home without professional guidance, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial difficulty. Be especially alert to the following:
In this type of scam, a "buyer" approaches you, offering to get you out of financial trouble by promising to stop foreclosure in minutes by paying off your mortgage or giving you a sum of money when the property is sold. The "buyer" may suggest that you move out 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, signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.
Some groups calling themselves "counseling agencies" may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself for free, 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 a HUD-approved housing counseling agency at (800) 569-4287 or TDD (800) 877-8339. Do this before you pay anyone or sign anything.
Here are several precautions that should help you avoid being "taken" by a scam artist:
You can contact your state's Attorney General, the State Real Estate Commission, or the local District Attorney's Consumer Fraud Unit for this type of information.
Delaying can't help. If you do nothing, YOU WILL LOSE YOUR HOME and your good credit rating.
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