Christian Community Mortgage Resource Network
Avoiding Foreclosure - Cont.
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:
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
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:
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?
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?
What precautions can I take?
These precautions can help you avoid being "taken" by a scam artist:
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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