Don't Lose Your House!

Although a bit of a diversion from my usual topics, it seems appropriate to pass along some information that has affected all of us either directly or indirectly. You cannot open a paper, watch television or search the internet without receiving more disturbing news about today’s housing market. Thousands are facing the possibility of losing their home, and most do not know the practical options available to them. Hopefully the information below might be of use to you or someone in your church or neighborhood.

Things happen

Maybe you lost your job. Maybe you’ve been seriously ill or injured. Maybe your interest rate went up on an adjustable rate mortgage. Whatever happened, do everything you can to make your mortgage payments. Your house is the most important investment you will ever have, so you don’t want to lose it.

Open your mail

Don’t ignore any letters you receive from your lender. Those late-payment notices often have tips on how to bring your account up to date, plus telephone numbers and the names of people you can talk to.

Keep in mind, the lender is in the business of loaning money not taking away homes. They want you to keep your home so you can keep making loan payments. They will often bend over backwards to keep you in your home.

Slash your spending

Find a way to get caught up on your mortgage payments. Here are three tips:

1. Pay the most important bills first: Mortgage….utilities…..automobile….

2. Slash spending on unnecessary things like cable TV, dining out, hobbies, and the like.

3. Try to bring in more income – consider a second job, sell luxuries like jewelry or other valuables.

Call your lender and explain what’s happening

Your lender will work with you IF you contact them early enough. Call before you miss your first or second payment. The longer you wait to let them know you are having difficulties, the fewer options you’ll have. Here are some options your lender might offer:

· Reinstatement: You pay the lender the full amount past due, plus late fees and penalties, and resume making regular payments.

· Repayment plan: You make regular payments plus added partial payments to make up for the payments you missed.

· Forbearance: You are allowed to stop making payments for a set amount of time. At the end of that time you begin making regular payments plus added partial payments to make up for the payments you missed.

· Loan modification: You and your lender agree to change the terms of your loan to make your monthly payments more affordable.

· Sell your house: Depending on the real estate market in your area, selling your home may provide the money needed to pay off your mortgage – and avoid foreclosure.

· If you have a VA or FHA mortgage, you may have other alternatives: Contact www.FHA.gov or www.homeloans.VA.gov for information.

Need help?

Talk to a housing credit counselor. Their services are often free or low cost.

Counselors have worked with lots of people in your situation. They can go over your options, offer you advice, and help you negotiate with your lender.

Don’t be shy when talking to a counselor. They’ve heard every story there is and yours won’t be the worst. Don’t make things sound better than they are. Explain how difficult your financial situation really is.

Call the housing authority in your city or state for help finding a legitimate housing counseling agency, or visit www.hud.gov for a list of Housing & Urban Development approved agencies.

Beware of scams

Scam artists profile neighborhoods with high foreclosure rates. They find victims by posting flyers on telephone polls, calling on the phone, mailing letters, knocking on doors, and getting referrals from other people they have befriended. Some might offer counseling help. Others might offer to negotiate with your lender. A few might offer to buy your home and sell it back to you when you get back on your feet.

These people seem friendly, kind and sympathetic – until you get their bill or they steal your house. Don’t be fooled! If something sounds too good to be true – walk away. And, never sign anything you don’t understand. If you aren’t sure, call a housing credit counselor before you sign anything.