Foreclosure resources can help you avoid losing your home because of missed payments. Help is available in virtually every community and can include credible advice from housing counselors approved by the U.S. Department of Housing and Urban Development (HUD). The counselors are an ideal starting point for people looking for foreclosure avoidance solutions.
Getting Counseling
The Federal Trade Commission strongly recommends that you meet with a government-certified housing counselor if you are about to start missing payments or have already missed a payment. A trained counselor can contact your lender on your behalf and immediately negotiate a suspension of preforeclosure activity while a permanent solution to your problem is found. Search for a local approved counselor by checking the HUD website (see Resources).
Foreclosure Rescue Firms
You should not enlist the services of so-called "foreclosure rescue firms." The Federal Trade Commission acknowledges that some of the for-profit firms are credible, but many others are managed by con artists out to take your money without providing any meaningful service. Nonprofit counselors can offer any foreclosure rescue service offered by a for-profit company, and all government-approved counselors are bound by an official code of ethics.
Loan Modification
Loan modification is a powerful option for avoiding foreclosure. The process allows lenders to completely rewrite the terms of a mortgage loan to make the payments more affordable. Housing counselors can negotiate loan modification agreements. Payments can be lowered by adding more months to the length of the loan, dropping the interest rate and changing the loan from an adjustable loan to a fixed loan.
Forbearance
Forbearance offers temporary help for avoiding foreclosure. Counselors can negotiate with lenders for forbearance consideration as well. Forbearance is a flexible program allowing you to skip several payments during a hardship, pay a reduced monthly payment over a period of time, or bring your account current by tacking on missed payments to the back of the loan.
Communication Is Key
The Federal Trade Commission reports that communicating with your lender early and often is one of the biggest keys to avoiding foreclosure and gaining access to the most foreclosure resources possible. For example, as of 2011, holders of mortgages backed by Fannie Mae may be eligible for an additional loan structured as a second mortgage, according to Hope Now, a nonprofit organization offering support and advice for homeowners. The second mortgage is used to pay for missed payments on the first mortgage and bring the account current. A similar program is available for people with loans insured by the Federal Housing Administration (FHA). Up to 12 missed payments can be covered through the FHA second mortgage loan program. These special programs may not be widely advertised but can be discovered through conversations with lenders.
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