http://www.financialstability.gov
http://www.makinghomeaffordable.gov
What is a HUD Home?
The Federal Housing Administration (FHA) is part of the Department of Housing and Urban Development (HUD). FHA provides federal mortgage insurance to reimburse mortgage lenders if a homebuyer defaults on a mortgage. Lenders can file a claim with the FHA when forced to foreclose on an FHA-insured single-family home, townhouse, or condominium because the owner is no longer able to make payments. FHA will reimburse the balance due on the mortgage and convey title of the property to HUD. A "HUD Home" is a one- to four-unit residence acquired as a result of foreclosure on an FHA-insured mortgage loan or by other special acquisition.
How Are HUD Homes Sold?
All properties available for purchase by the public are offered for sale at Internet listing sites maintained by HUD Management and Marketing (M&M) contractors. Generally, HUD Homes are sold in what is known as an "offer period," during which a potential buyer's offer must be made. HUD offers priority and, in some cases, discounts to homebuyers with special needs:
For disaster victims (during an initial 10-day offering period, with up to 100% discounts). For "good neighbor next door" participants (during a 5-day priority period for homes in revitalization areas, at a 50% discount). For owner-occupants during the open "offer period" (bids are collected and are opened all at once at the end). For any buyer during the "extended basis" period (any acceptable bid may be chosen). HUD Homes are offered for sale at fair market value based on a recent appraisal. Buyers wanting to live in the homes have first priority. At the end of the offer period, all offers are opened and the bid providing the highest net return to HUD may be accepted. During the extended basis period brokers may submit offers any business day on behalf of buyers, including investors. HUD will usually notify the broker within 48 hours if a bid is acceptable.
Any real estate broker registered with HUD may submit contracts for purchase. HUD uses brokers for their expertise in local residential real estate markets. The agency is not sufficiently staffed to show properties or provide other services normally handled by real estate professionals.
Homes are initially offered to owner-occupant purchasers who plan to use the home as their primary residence. Following the priority period for owner-occupants, unsold properties are then available to all buyers, including investors. HUD doesn't provide direct financing to buyers of HUD homes. Buyers must obtain financing through either their own cash reserves or a mortgage lender.
Any real estate broker registered with HUD may submit an offer and contract to purchase on behalf of a buyer. HUD pays the real estate broker's commission, if included in the contract.
You Can Earn up to 5% Commission!
Upon closing of a sale, HUD pays the selling broker a commission of up to 5% of the selling price. HUD will pay the commission only if the percentage has been specified in the offer. A listing broker is paid up to 1% of the selling price.
Become a Registered Real Estate Professional to Sell HUD Homes
HUD sold more than 50,000 homes from its Real Estate Owned (REO) portfolio in each of the last two fiscal years. Purchasers submitting offers on these homes were required to use a real estate professional registered with HUD. That's where you, the real estate professional, fit in!
If you want to be able to submit offers on behalf of buyers for HUD Homes, you must be registered with HUD. No individual can use another individual's registration (for example, a managing broker's) in lieu of their own. The registration process takes three to four weeks, so don't delay, register now!
How to Register
It's easy for licensed real estate professionals to qualify to sell HUD Homes. You must first sign and submit HUD's Broker application and Selling Broker Certification forms to the HUD contractor that handles these sales in your area.
You can do this by going to HUD's M&M contractor website, locating the contractor for your state and clicking broker or agent information on that site. You will need to submit the following forms:
SAMS 1111 Broker Application
SAMS 1111A Selling Broker Certification
Upon completion, you can show, advertise, and submit offers on HUD Homes.
Registration is Active for One Year
HUD does not warrant the condition of its properties and won't pay for correcting defects or repair. Since the new owner will be responsible for making needed repairs, HUD strongly urges every potential homebuyer to get a professional inspection prior to submitting an offer to purchase.
How Does a HUD-registered Real Estate Professional Submit an Electronic Bid?
Electronic bidding is the only method to submit offers for HUD Homes. HUD-registered real estate professionals and their agents can electronically submit bids on HUD Homes 24 / 7 over the Internet.
All HUD Home sales listings are managed by HUD's (M&M) contractors. Visit the contractor website for instructions for the quick and simple bidding process.
When you have completed the process, always review your bid and make any necessary corrections. The contractor will assign you a Bid Confirmation Number. Note it on the right hand corner of the sales contract. If you are the winning bidder, you must submit a completed, signed sales contract using HUD Form 9548, dated 1/99, to your (M&M) contractor.
How Can I Get Further Information?
If you have more questions, contact the (M&M) contractor serving your area.
NOTE: Homeowners, contact your existing lender and/or a new lender to discuss how you may qualify for the H4H program.
The list of participating lenders is not available yet. We will publish it in the coming days.
The HOPE for Homeowners (H4H) program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. H4H is an additional mortgage option designed to keep borrowers in their homes.
The program is effective from October 1, 2008 to September 30, 2011.
As many as 400,000 homeowners could avoid foreclosure through this program over the next three years. If you are having trouble making your mortgage payments, HOPE for Homeowners may be able to help you, by refinancing your loan into a new 30-year fixed rate loan with lower payments.
How the Program Works
There are four ways that a distressed homeowner could pursue participation in the HOPE for Homeowners program
Homeowners may contact their existing lender and/or a new lender to discuss how to qualify and their eligibility for this program. Servicers working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a HOPE for Homeowners loan. Originating lenders who are looking for ways to refinance potential customers out from under their high-cost loans and/or who are willing to work with servicers to assist distressed homeowners. Counselors who are working with troubled homeowners and their lenders to reach a mutually agreeable solution for avoiding foreclosure. It is envisioned that the primary way homeowners will initially participate in this program is through the servicing lender on their existing mortgage. Servicers that do not have an underwriting component to their mortgage operations will partner with an FHA-approved lender that does.
Step 1: Cost-Benefit Analysis
Lender considerations:
Given their fiduciary responsibilities and financial obligations, lenders will assess their portfolio and perform a cost-benefit analysis to determine the feasibility of offering this program to struggling homeowners.
Affordability versus value: lenders will take a loss on the difference between the existing obligations and the new loan, which is set at 90 percent of current appraised value. The lender may choose to provide homeowners with an affordable monthly mortgage payment through a loan modification rather than accepting the losses associated with declining property values. Borrower eligibility: Lenders that determine the H4H program is a feasible and effective option for mitigating losses will assess the homeowner’s eligibility for the program: The existing mortgage was originated on or before January 1, 2008; Existing mortgage payment(s) as of March 1, 2008 exceeds 31 percent of the borrowers gross monthly income; The homeowner did not intentionally default, does not have an ownership interest in other residential real estate and has not been convicted of fraud in the last 10 years under Federal and state law; and The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the H4H mortgage. Consumer considerations:
The lender will disclose to the homeowner the benefits of the program:
Home retention, New affordable mortgage based on current appraised value, 10 percent equity The lender will also disclose to the homeowner the costs of the program:
3 percent upfront mortgage insurance premium and a 1.5 percent annual premium, Equity and appreciation sharing with the Federal government, and Prohibition against new junior liens against the property unless they are directly related to property maintenance. Step 2: Negotiations Between Borrowers and Lien Holders
If the lender refinancing the loan does not hold the senior mortgage lien, it will need to secure an agreement from the existing lien holder to waive all prepayment penalties and default fees on the existing loan and accept the loan proceeds from the H4H loan as payment in full. The loan amount (including the 3 percent UFMIP) for the new H4H loan cannot exceed 90 percent of the current appraised value of the property.
The lender will engage existing subordinate mortgage lien holders to extinguish all subordinate liens on the subject property. To entice subordinate lien holders to participate in the negotiation process and release their liens, FHA has the authority to share its future appreciation entitlement with them.
Step 3: Originating an H4H Mortgage
The lender will qualify the homeowner for the new H4H mortgage using the guidelines established under the terms of the program’s unique statutory requirements, ensuring the homeowner has the capacity to make the new payment on the H4H mortgage in a timely manner.
During underwriting of the loan, the lender will calculate the future appreciation interest amount for each subordinate lien holder in accordance with instructions provided by FHA.
At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD’s appreciation share.
Following funding of the loan the lender will record – in addition to the typical security instrument and note for the first mortgage – a shared equity note and mortgage (SEM) and a shared appreciation note and mortgage (SAM). These mortgages will be serviced by FHA.
The lender will also submit the new mortgage for insurance to FHA, certifying that it has been originated, underwritten and closed in accordance with the H4H program guidelines.
Step 4: Fulfilling H4H Mortgage Obligations
Upon sale of the property, the homeowner will use their sale proceeds to pay off the H4H mortgage as well as the shared equity and shared appreciation mortgages.
FHA will provide instructions to the settlement agents regarding subordinate lien holders who are entitled to a portion of any appreciation. The lien holder that previously held the highest priority will receive payment up to the full dollar amount of its interest, not to exceed the amount of available appreciation, and so on, until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA.
In instances where the homeowner failed to make the first payment on their new H4H mortgage, the H4H statute prevents FHA from paying claim benefits to anyone holding the mortgage.
YOU WORKED HARD FOR HOMEOWNERSHIP
The Federal Housing Administration has helped millions of Americans secure their dream of homeownership since 1934. Now we want to keep those dreams alive.
If you have an adjustable rate mortgage coming due or your interest rate is already too high, you owe it to yourself to look at the safe and affordable financing options provided by government-insured mortgages through the Federal Housing Administration (FHA). We provide mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family, multifamily, manufactured homes and healthcare facilities. It is the largest government backed mortgage insurer.
WHAT IS FHASecure
FHASecure is a refinancing option that gives homeowners with non-FHA adjustable rate mortgages (ARMs), current or delinquent and regardless of reset status, the ability to refinance into a FHA-insured mortgage. With FHASecure, the lender will not automatically disqualify you because you are delinquent on your loan, and the lender may offer you a second mortgage to make up the difference between the value of your property and what you owe.
WHO IS ELIGIBLE
Starting on July 14, 2008, FHASecure will begin to provide additional assistance to subprime borrowers with adjustable rate mortgages, and help to restore liquidity and stability to the markets. It will assist families who have missed up to three monthly mortgage payments over the previous 12 months or have experienced temporary economic hardship, such as loss of overtime or medical needs, as well as those who were affected by payment shock. The expansion will also encourage lenders to voluntarily write down outstanding subprime mortgage principal.
So long as you are current on your mortgage and have sufficient income to make the mortgage payment, you are eligible for an FHASecure refinance. If you are delinquent, the default must have been due to the payment shock of an interest rate reset or, in the case of an Option ARM, the "recasting" of the mortgage to fully amortizing.
By refinancing into a FHA-insured mortgage, you can expect to pay lower monthly mortgage payments. FHASecure can improve the quality of life for many communities by helping to reduce the number of mortgage defaults and bringing greater stability to local housing markets.
FHASecure Expanded
08-13 Attachment - FHA Refinance Programs Comparison Matrix
FHASecure Frequently Asked Questions for Homeowners
FHASecure Frequently Asked Questions for Housing Industry
FHA Mortgage - Secure Fact Sheet - Refinance Options FHA Mortgage - Secure Fact Sheet - Refinance Options
You Can Avoid Foreclosure and Keep Your Home
Losing a home can be financially and personally devastating. Relief may be available. Here's key information to help you keep your home.
People facing money problems:
If you are facing unemployment or have money problems, you may be able to keep your home if you know the right steps to take. Read on for important information and links to local organizations that can help you get through difficult times. Government organizations and the mortgage industry worked together to provide this information to help you keep your home.
Disaster area victims:
If you live or work in an area declared a disaster by the President and the hurricane, tornado, flood, wildfire, or other natural or man-made event damaged your home or reduced your income, your lender will provide disaster relief: For 90 days on an FHA-insured loan. Go to the Disaster Help location from the button on the left of this page. In most cases for other loans.
Military personnel and spouses:
If you or your spouse are on active military duty, you may qualify for a reduction in your interest rate resulting in lower payments. Read how the Servicemembers Civil Relief Act of 2003 (formerly the Soldiers' and Sailors' Civil Relief Act of 1940) affects military homeowners. Facing Money Problems:
Financial problems are most often associated with major life changes like:
Job loss. Cuts in work hours or overtime. Retirement. Illness, injury, or death of a family member. Divorce or separation. If your family is facing any of these issues and you can't pay your bills, look closely at what you owe and what you earn. Eliminate unnecessary spending and reach out for help. Taking action right away can help you protect your family from the loss of your home.
Steps to take when you can't pay your mortgage:
1. Contact your lender as soon as you have a problem
Many people avoid calling lenders about money troubles because we:
Feel embarrassed discussing money problems with others. Believe that if lenders know we are in trouble, they will automatically rush to a collection agency or foreclosure (seize property for failure to pay a mortgage debt).
Lenders want to help borrowers keep their homes because:
Foreclosure is expensive for lenders, mortgage insurers and investors. HUD and private mortgage insurance companies, plus investors like Freddie Mac and Fannie Mae, require lenders to work aggressively to help borrowers facing money problems.
Lenders have workout options (choices) to help you and:
These options work best when your loan is only one or two payments behind. The farther behind you are on your payments, the fewer your options.
Don't assume that your problems will quickly correct themselves:
Don't lose valuable time being overly optimistic. Contact your mortgage lender to discuss your circumstances as soon as you realize that you're unable to make your payments. Expect your lender to explore many possible solutions for you, without guaranteeing any one particular solution.
Finding your lender:
Check the following sources to contact your lender:
Your monthly mortgage billing statement. Your payment coupon book.
Information lenders need you to have ready when you call:
Your loan account number. A brief explanation of your circumstances.
Your recent income documents:
Pay stubs. Benefit statements from Social Security, disability, unemployment, retirement, or public assistance. Tax returns or a year-to-date profit and loss statement, if self-employed. A 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 fully and truthfully, then return them to your lender quickly. Your lender will review the complete package before talking with you about a solution.
Don't ignore mail from your lender
If you don't get in touch with your lender, your lender will try to contact you by mail and phone soon after you stop making payments. If your lender doesn't hear from you, they will have to start legal action leading to foreclosure. This will greatly increase the cost to bring your loan current.
Information for families with FHA-insured loans
The FHA provides many alternatives and ways for borrowers to get help. These may include mortgage modifications (changes), special forbearances (allowances), and other actions you can take to avoid foreclosure.
FHA works closely with customers who have FHA-insured loans. Do you feel your lender is not responding to your questions? The FHA is ready to help! Contact us at (800) CALL-FHA.
2. Talk to a housing counselor
If you don't feel comfortable talking with your lender, you should immediately contact a HUD-approved housing counseling agency and make an appointment with a counselor. Most approved counselor sessions are free or cost very little and your counselor can help you:
Review your financial situation, determine what options are available to you, and negotiate with your lender. Learn which of the various workout arrangements the lender believes makes the most sense for you and your family, based on your circumstances. Contact the lender to discuss a workout plan. Avoid future credit problems before you get too far behind on mortgage payments. Find information on services and programs in your area that provide financial, legal, medical or other assistance. A good counselor will help you create a monthly budget plan to ensure you meet all your monthly expenses, including your mortgage payment. Your personal financial plan will help you and your lender determine whether a reduced or delayed payment schedule could help you.
To find out more about HUD-approved housing counseling agencies and receive an automated referral to your three closest housing counseling agencies, please call toll free (800) 569-4287 on weekdays between 9:00 a.m. and 5:00 p.m. Eastern Standard Time (6:00 a.m. to 2:00 p.m. Pacific Time).
Many local housing counseling agencies are connected with national and regional housing counseling intermediaries (mediators). The website for HUD-approved National and Regional Housing Counseling Intermediaries describes the full range of assistance offered and provides maps showing their member's locations.
3. Prioritize your debts (rank them by importance)
You will need a new, tightened budget if you lose a job. Prioritize your bills and pay those most necessary for your family: food, utilities and shelter.
Failing to pay any of your debts can seriously affect your credit rating, but if you stop making your mortgage payments you could lose your house. Try these suggestions to keep your home:
Whenever possible, use any income available after paying for food and utilities to pay your monthly mortgage payments. If your income has dropped, consider getting rid of or cutting back on other expenses (such as dining out, entertainment, cable, or telephone services). If you still do not have enough income, consider cashing out other resources like stocks, savings accounts, or personal property like a boat or a second car. Take any responsible action that will save cash. Besides speaking with your lender, you may want to contact a nonprofit consumer credit counseling agency that specializes in helping restructure debt by negotiating lower payments or long-term payment plans with your creditors. Trustworthy credit counseling agencies provide their services free of charge or for a small monthly fee tied to a repayment plan. Beware of credit counseling agencies that offer counseling for a large upfront fee or donation.
For consumer debt advice.
When you call a credit counseling agency, they will ask you to provide current information about your income and expenses. Make sure you ask if the agency has a charge before you sign any documents!
Preserve your good credit
Do not underestimate how important it is to keep your good credit. Your future ability to purchase items, rent or buy a home, often requires a credit check. Consumer credit agencies and your lender can help you explore solutions to keep your credit rating from getting blemished.
Maintaining good credit is even important for job hunters. When you apply for a job, the employer probably will check your credit report to determine whether:
You have been sued. You have filed for bankruptcy. You have trouble paying your bills.
4. Explore loan workout solutions with your lender
First and foremost, if you can keep your mortgage current, do so. But if you find you are unable to make your payments, you might qualify for a loan workout option. Check with your lender as some options may not apply to your loan if it is not insured by FHA.
If your problem is temporary - call your lender to discuss these possibilities:
· Reinstatement: Your lender is always willing to discuss accepting the total amount owed in a lump sum by a specific date.
· Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time and then agree to another option to bring your loan current. A forbearance option is often combined with a reinstatement when you know you will have enough money to bring the account current at a specific time. The money might come from a hiring bonus, investment, insurance settlement, or tax refund.
· Repayment plan: You may be able to get an agreement to resume making your regular monthly payments, plus a portion of the past due payments until you are caught up.
If it appears that your situation is long-term or will permanently affect your ability to bring your account current - call your lender to discuss options:
· Mortgage modification: If you can make payments on your loan, but don't have enough money to bring your account current or you can't afford your current payment, your lender may be able to change the terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways:
o Adding the missed payments to the existing loan balance.
o Changing the interest rate, including making an adjustable rate into a fixed rate.
o Extending the number of years you have to repay.
· Partial Claim: If your mortgage is insured, your lender might help you get a one-time interest-free loan from your mortgage guarantor to bring your loan current over several years. You qualify for an FHA partial claim if:
o Your loan is between 4 and 12 months delinquent.
o You are able to begin making full mortgage payments again.
When your lender files a partial claim, HUD will pay your lender the amount necessary to bring your mortgage current. You must sign 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.
If keeping your home is not an option - call your lender to discuss these possibilities:
· Sale: If you can no longer afford your home, your lender will usually give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to use the services of a real estate professional who can aggressively market the property.
· Pre-foreclosure sale or short payoff: If you can't sell the property for the full amount of the loan, your lender may accept less than the amount owed. Financial help may also be available to pay other lien holders and/or help towards some moving costs. You may qualify if:
o The loan is at least 2 months delinquent.
o You (or your real estate professional) can sell the house within 3 to 5 months.
o A new appraisal (obtained by your lender) shows that the value of your home meets HUD program guidelines.
· Assumption: A qualified buyer may be allowed to take over your mortgage, even if your original loan documents state that it is non-assumable.
· Deed-in-lieu of foreclosure: As a last resort, you "give back" your property and the debt is forgiven. This will not save your house, but it is less damaging to your credit rating. This option might sound like the easiest way out, but it has limitations:
o You usually have to try to sell the home for its fair market value for at least 90 days before the lender will consider this option.
o This option may not be available if you have other liens, such as other creditor judgments, second mortgages, and IRS or state tax liens.
Resources for finding a real estate agent and selling your home
If you need to sell your home, you'll have to answer many questions. You'll need to determine how much your house is actually worth, and you'll have to find a real estate agent you are comfortable with. The following resources may help:
National Association of Realtors National Association of Real Estate Brokers International Real Estate Digest National Association of Hispanic Real Estate Professionals The Home Store If you have an FHA-insured loan and your lender is not responsive
Your lender has to follow FHA servicing guidelines and regulations for FHA-insured loans. If your lender is not cooperative, contact FHA's National Servicing Center toll free at (888) 297-8685 or via email hsg-lossmit@hud.gov. HUD does not oversee VA or conventional loans.
Beware of predatory lending schemes
Most mortgage lenders are trustworthy and provide a valuable service by allowing families to own a home without saving enough money to buy it outright. But dishonest or "predatory" lenders do exist and engage in lending practices that increase the chances that a borrower will lose a home to foreclosure. Beware especially of those who make high-risk second mortgages. Other abusive practices include:
Making a mortgage loan to an individual who does not have adequate income. Charging excessive interest, points and fees. Repeatedly refinancing a loan without providing any real value to the borrower. Borrowers facing unemployment and/or foreclosure are often targets of predatory lenders because they are desperate to find any "solution".
Homeowners receive many refinance offers in the mail saying they are "pre-approved" for credit based on the equity in their homes. Borrowing against your house may seem attractive when you are struggling to pay your mortgage and other bills. But stop and think about this: if you can't make your current payments, increasing your debt will make it harder to keep your home, even if you get some temporary cash.
Beware of scams
Equity skimming: If a "buyer" approaches you offering to repay the mortgage or sell the property if you sign over the deed and move out - it may be a scam. Signing over your deed does not necessarily relieve you of the responsibility of paying the loan. Phony counseling agencies: If you have any doubt about paying for counseling (that is often free of charge) call a HUD-approved housing counseling agency toll free at (800) 569-4287 or TDD (800) 877-8339 before you pay anyone or sign anything. Do not sign anything you do not understand - it is your right and duty to ask questions. Information is your best defense against becoming a victim of predatory lending. Where to report suspected predatory lending
Homeowners can either visit the Stop Mortgage Fraud website or call toll free (800) 348-3931 to get information on what steps to take to file a complaint. Homeowners who call will also receive a booklet containing information found on the website.
For more information about predatory lending go to:
· Freddie MAC's Predatory Lending
· Freddie MAC's "Don't Borrow Trouble"
Common Questions: What happens when I miss my mortgage payments?
Foreclosure may occur. This means your lender can legally 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, meaning you would not only lose your home, you also would owe HUD money.
Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if at all possible.
What should I do?
· Do not ignore letters from your lender. If you are having problems making your payments, call or write to your lender's loss mitigation department immediately.
· Explain your situation to the lender and be prepared to provide your financial information. Without this information, he/she may not be able to help.
· Stay in your home for now. You may not qualify for assistance if you abandon your property.
· Contact a HUD-approved foreclosure housing counseling agency toll free at 1-800-569-4287 or TDD 1-800-877-8339. These agencies have valuable information on services and programs offered by government and private and community organizations including credit counseling. Typically, their services are free of charge.
Who is my lender? How do I make contact?
Look at your monthly mortgage coupons or billing statements for the lender's name and contact information.
I don't remember what type of mortgage I have. How can I find this information?
Look on the original mortgage documents or call your mortgage lender.
Do I need to keep living in my house to qualify for assistance?
Usually yes, but call your lender to discuss your specific circumstances and get advice on options that may be available.
My employer has already announced layoffs in the coming month. What can I do now?
You have started learning about available options here. Now, figure out if a layoff will make it hard for your family to make your mortgage payments. If so, consider other resources you have to pay your mortgage. Review your spending habits and see where you can reduce spending. If you have a lot of other debt, consider contacting a nonprofit, consumer credit counseling agency. Take advantage of any help your employer offers. If you still believe you will have trouble making your mortgage payments, contact your lender right away.
What are the key points to remember?
1. Explore every alternative-don't lose your home and damage your credit history.
2. Call or write your mortgage lender immediately and be honest about your situation.
3. Stay in your home to make sure you qualify for assistance.
4. Arrange an appointment with a HUD-approved housing counselor to explore your options. Call toll free at (800) 569-4287 or TDD (800) 877-8339.
5. Beware of scams.
6. Never sign anything you don't understand. And remember that signing over the deed to someone else does not necessarily relieve you of your loan obligation.
7. Act now. Delaying can't help because if you do nothing, you will lose your home and your good credit rating!
What precautions can I take?
These precautions can help you avoid being "taken" by a scam artist:
· Don't sign any papers you don't fully understand.
· Make sure you get all "promises" in writing.
· Beware of loan assumptions in which you are not formally released from liability (responsibility) for your mortgage debt.
· Check with a lawyer or your mortgage company before entering into any deal involving your home.
Check to see if there are any complaints against the prospective buyer. You can contact your state's Attorney General, the State Real Estate Commission, or the local District Attorney's Consumer Fraud Unit for this information.
Will I be responsible for any out-of-pocket expenses if I am approved for a workout option?
You may have to pay expenses such as recording fees for a loan modification depending on your lender. But if a lender has to start foreclosure, you may have to pay very high legal fees. To avoid this, call your lender as soon as you realize you might have trouble.
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