President of Silicon Valley Association of Realtors Jeff Bell is a man with a mission as he goes about promoting HUD advice on foreclosure prevention. “Half the delinquent owners I speak to are just too scared to speak to their lenders” he says. “They think this will speed up foreclosures, but in fact the opposite is true.
“Nobody wants to see a family out on the street, and the real truth is that lenders are keen to help them stay at home, especially with current government attention and media hype. Borrowers just need to start early enough to ensure there’s time enough to make a plan.”
The Department of Housing and Urban Development (HUD) recommends that distressed home owners take up the following advice as soon as alarm bells start ringing:
Don’t ignore the problem: Do something straight away when you realise that you might be late with a payment. The longer you delay, the more complicated the recovery process becomes.
Contact your lender immediately: Lenders want regular payments and profits, not problem houses to sell at a loss. They have various cards up their sleeves to help you.
Open your mail: Your post and emails could include messages from your lender – your failure to read your mail will not be accepted as an excuse at foreclosure court.
Know your rights: Revisit your loan documents to learn what your lender may, and may not do. Pay a visit to your local HUD office as soon as you can, and discuss your situation openly with a counselor. Remember, HUD is on your side but they need your cooperation if they are to take on a bank on your behalf.
Get your mind around foreclosure options: Visit HUD online at http://portal.hud.gov/portal/page/portal/HUD for a comprehensive explanation.
Make an appointment with a HUD-approved counselor: Low cost or even sometimes free advice is available countrywide. An independent counselor can help you better understand your situation, straighten out your finances and represent you with your lender. Call HUD at 800.569.4287 or TTY 800.877.8339 for more information.
Prioritize the way you spend your money: Your home is your top priority after family health. Keep a record to see where your money goes; eliminate what you can, and set affordable budgets for the rest. Defer what you can, but please remember that what goes around will come around.
Raise extra cash: Do you have a second car, jewelry or a whole life insurance policy you can sell? Who’s at home, not working and why not? Everything you do to help yourself will help your lender help you too.
Stay away from foreclosure prevention companies: You don’t need to pay for help – you already helped pay for HUD with your taxes and now its payback time.
Watch out for scams: Foreclosure prevention companies often hide a clause in their documentation that means you cede your home to them. Do not sign anything to do with your mortgage or your home without first consulting HUD or your attorney.
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