Contact a Nonprofit Housing Counselor
Help and information is available to you free of cost.
Making Home Affordable is a key part of the Obama Administration's effort to help homeowners avoid foreclosure.
The HOPE NOW alliance provides a 24-hour hotline to provide mortgage counseling assistance in multiple languages. 1-888-995-HOPE.
The Florida Housing Finance Corporation administers foreclosure prevention assistance programs that address the unique issues of our state. Visit the Florida Hardest-Hit Fund.
HUD's Tips for Helping Homeowners (print version)
to Avoid Foreclosure
people avoid calling their lender when they have money troubles. Most
of us are embarrassed to discuss our money problems with others or
believe that if lenders know we are in trouble, they will rush to
collection or foreclosure.
Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems.
Lenders have workout options to help you keep your home. However, these options work best when your loan is only one or two payments behind. The farther behind you are on your payments, the fewer options are available.
Do not assume that your mortage problem will quickly correct itself. Don't lose valuable time by being overly optimistic. Contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.
Information To Have Ready When You Call:
To help you, lenders typically need:
|Your loan account number|
|A brief explanation of your circumstances|
|Recent income documents such as pay stubs, Social Security benefits statements, disability, unemployment, retirement, or public assistance. If you are self-employed, have your tax returns or a year-to-date profit and loss statement from your business available for reference)|
|List of household expenses|
Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for assistance, you must complete the forms and return them to your lender quickly. The completed package will be reviewed before the lender talks about a solution with you.
Do Not Ignore Mail or Phone Calls From Your Lender
lender will try to contact you by mail and phone soon after you
stop making payments. It is very important that you respond to the
mail and the phone calls offering help. If your lender does not
hear from you they will be required to start legal action leading
to foreclosure. This will substantially increase the cost of bringing
your loan current. Do not ignore contact from your lender.
Understand the relevant terms: If you are working with your lender or an approved housing counselor to keep your home, there are several options:
- Reinstatement: Your lender may agree to let you pay the total amount you are behind, in a lump sum payment and by a specific date. This is often combined with forbearance when you can show that funds from a bonus, tax refund, or other source will become available at a specific time in the future. Be aware that there may be late fees and other costs associated with a reinstatement plan.
- Forbearance: Your lender may offer a temporary reduction or suspension of your mortgage payments while you get back on your feet. Forbearance is often combined with a reinstatement or a repayment plan to pay off the missed or reduced mortgage payments.
- Repayment Plan: This is an agreement that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period you have gradually paid back the amount of your mortgage that was delinquent.
- Loan modification: This is a written agreement between you and your mortgage company that permanently changes one or more of the original terms of your note to make the payments more affordable.
If you and your lender agree that you can not keep your home, there may still be options to avoid foreclosure:
- Short Payoff: If you can sell your house but the sale proceeds are less than the total amount you owe on your mortgage, your mortgage company may agree to a short payoff and write off the portion of your mortgage that exceeds the net proceeds from the sale.
- Deed-in-lieu of foreclosure: A deed-in-lieu of foreclosure is a cancellation of your mortgage if you voluntarily transfer title of your property to your mortgage company. Usually you must try to sell your home for its fair market value for at least 90 days before a mortgage company will consider this option. A deed-in-lieu of foreclosure may not be an option if there are other liens on the property, such as second mortgages, judgments from creditors, or tax liens.
- Assumption: An assumption permits a qualified buyer to take over your mortgage debt and make the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.
- Refinancing: While refinancing is not necessarily a
good option when facing foreclosure and can sometimes even be a
predatory practice, there are instances where it may help. Talk to your
lender to see if refinancing is an option for you.
Do not fall victim to a foreclosure recovery scam
If any business or individual offers to help you stop foreclosure immediately by signing a document authorizing them to act on your behalf or to set up financing for you, do not sign without consulting a professional (an attorney or HUD-approved counselor). This may be a trick to get you to sign over title to your home. You are then vulnerable to losing your home and all of your equity in your home to the so called “rescuer.”
- Recognizing, Avoiding and Reporting Scams
- Recognize predatory lending
- Florida Attorney General's Mortgage Fraud Task Force
Carefully examine your finances
Can you cut spending on optional expenses, delay payments on credit cards or other unsecured debt until you have paid your mortgage? Do you have assets that you could sell to help reinstate your loan? Can anyone in the household get a second job to help with income? These efforts to manage your finances may help you find income to apply to your outstanding payments and will demonstrate to your lender that you are willing to work on your finances and make sacrifices in order to keep your home.
Know the Law