Tips for Avoiding Foreclosure

New Century IDA teaches people to budget and save in preparation for putting a down payment on a home. But it doesn’t stop there. New Century IDA wants each of its graduates to be prepared for not only purchasing a home, but for being able to stay in that home and maintain it. If you start having problems making your mortgage payment, it is important to be proactive and utilize the resources that are available to you in order to avoid foreclosure.

If you are having trouble making your mortgage payment, remember the following tips provided by New Century IDA.

1. Don't ignore the problem.

• The further behind you get, the harder it will be to reinstate your loan.

2. Contact your lender as soon as you realize that you have a problem.

• Lenders have options available that can help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

• The first notices you receive will offer information about foreclosure prevention options.
• Later mail may include notices of pending legal action. Failure to open mail is not an excuse in foreclosure court.

4. Know your mortgage rights.

• Review your loan documents so you know what your lender may do if you can't make your payments.
• Learn about foreclosure laws and time frames in your state by contacting the State Government Housing Office.

5. Understand foreclosure prevention options (aka loss mitigation).

6. Contact a HUD- approved housing counselor.

• HUD funds free or low- cost housing counseling nationwide.
• To find a HUD- approved housing counselor near you call (800) 569-4287 or (800) 877-8339.

7. Prioritize your spending.

• After healthcare, keeping your house should be your top priority.
• Review your finances to see where you can cut spending.

8. Use your assets.

• Do you have assets you can sell for cash? Can you get an extra job?
• Demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.

• You don't need to pay fees for foreclosure prevention help!

10. Don't lose your house to foreclosure recovery scams!

• If a firm claims that they can stop your foreclosure immediately and you can sign a document appointing them to act on your behalf, you may actually be signing over the title to your property.
• Never sign a legal document without getting the advice of an attorney, real estate professional, or a HUD- approved housing counselor.