Foreclosure Prevention Counseling
Behind in your mortgage payments? Fearful of losing your home? There’s help for your situation, and you don’t have to go it alone. InCharge is a HUD-approved housing counseling agency that provides assistance to struggling homeowners with the goal of helping them keep their homes and avoid foreclosure when possible.
If you are behind on your monthly bills, including your mortgage, InCharge offers free (that’s free — no charge, no obligation) confidential financial counseling assistance. Let one of our certified housing counselors assist you in person or via the telephone.
Free Foreclosure Prevention Counseling
What Is a Foreclosure?
Foreclosure is the term given the legal process that allows the lender to reclaim a home or other real property and resell it when the owner fails to make mortgage payments for an extended period. Details vary from state to state; however, under federal law, a servicer generally is prevented from starting the foreclosure process until a loan is more than 120 days past due.
This taking and reselling of a foreclosed home is alarming enough, but if the property sells for less than the amount owed on the mortgage, the original owner could be on the hook for the difference (also known as a deficiency judgment). This can happen if the owner made a minimal down payment and has not been in the home long, or if local property values have slumped.
In cases where the property sells for more than the mortgage balance (plus legal expenses), the owner will be due the surplus. Sometimes — forwarding addresses aren’t current or accurate, for instance — notification falls through the cracks. In such cases, former owners should check with the local clerk of court. Requesting the record is free, or may even be online, and applying for the surplus rarely is complicated. Avoid anyone who offers to check on your surplus for a fee, or who offers to buy the rights to your surplus.
As you might expect, enduring a foreclosure does long-term damage to the owner’s credit history. Foreclosures also are a matter of public record.
There are ways to stop a foreclosure, one of them is to be proactive, says Chicagoland-based author, podcaster, and veteran real estate advisor Dave Kohl: “Best practice is to take matters into your own hands, and do so as soon as you realize that you could become delinquent.
“Know what you owe and how much (or little) money would be left if you sold the property based on checking local home prices. Determine if a sale would pay off your debt and leave you with enough to rent or buy where you can better afford. … Sometimes a refinance can make the difference. The important thing is to consider all possibilities, giving yourself as long as possible to make your best decision.”
Foreclosure can be triggered by assorted causes, most often involving failure to make monthly mortgage payments, or the mortgage holder detects fraud — the applicant claimed to be an occupying owner to get the best interest rate, but instead uses the home as a rental — and exercises the option to accelerate the loan repayment.
Whatever the situation, after a period of time – specified in the closing documents – the lender will accelerate the loan. An acceleration letter will be sent requesting the full amount past due, to be remitted by a specified date.
If the amount is not paid, the lender will accelerate the loan, commencing foreclosure proceedings. A foreclosure package will be forwarded to an attorney or trustee by the lender (depending on the state in which the property is located) and legal action begins. The time required for the lender to foreclose varies by state.
Upon arrival of the foreclosure package, the attorney’s fees and costs begin to accrue, becoming part of the amount due and the total debt. The attorney files a complaint, starting the foreclosure process. Attorney’s costs are relentless: The longer the process, the more it costs the consumer.
As the foreclosure progresses, leading ultimately to toward the sale, the fear of losing the home and all that the owner has invested becomes a reality. Once the foreclosure sale takes place, the home is lost. In certain states, a property may be redeemed, but at the total debt amount (including legal fees), not just the past-due amount.
If a foreclosure sale takes place and the former homeowners remain in the property, local authorities will carry out an eviction. All personal items will either be set out on the street or stored for a specified period of time. In addition, individuals can be sued in some states for a deficiency balance, and wages and/or assets can be attached.
A foreclosure will crash your credit score, making it difficult to obtain another mortgage in the next two to three years, minimum. If there is an upside, it’s that the impact of the foreclosure will recede with each passing year; meanwhile, there are many ways you can begin to rebuild your credit immediately. InCharge counselors can advise you in this area, as well.
What Is Foreclosure Prevention Counseling?
Home ownership is not just the bedrock of the traditional American dream; once achieved, the treasured dwelling place also can become a store of wealth. For many, a house is a family’s more valuable possession. Additionally, keeping families in their homes preserves communities, helps neighborhoods prosper, encourages rising property values, and increases the tax base.
The former is the reason homeowners must dig in when foreclosure threatens. The latter is a key reason lawmakers from county commissions to Congress heed at least one lesson from the Great Recession a decade ago: Government has an interest in preventing avoidable foreclosures.
Washington’s Making Home Affordable plan helps responsible homeowners obtain affordable refinancing or loan modifications that allow them to remain in their homes.
Get started by finding a legitimate housing or financial counselor who can help work through your problems:
- The U.S. Department of Housing and Urban Development (HUD) can help you find a counselor. Call (800) 569-4287 or (877) 483-1515, or visit the agency’s website.
- HOPE NOW, a cooperative effort of mortgage counselors and lenders to help homeowners, offers the Homeowner’s HOPE Hotline. Reach a nonprofit, HUD-approved counselor at (888) 995-HOPE.
What Happens During a Foreclosure Prevention Counseling Session
During a foreclosure preventing counseling session, your counselor will:
- Review your current income, living expenses, savings, and debts.
- Help you understand your options and possible solutions to your financial challenges.
- Assess your options for avoiding foreclosure, which could include a loan modification available under the federal Making Home Affordable program or another borrower assistance program.
Your counseling session comes with no additional obligations.
Prepare for Your Counseling Session
Being prepared will help your counselor help you. By better understanding your financial position, (s)he can assess potential options for you. When you speak with your counselor, have the following documents at hand:
- Most recent pay stubs and most recent tax return.
- Most recent bank statements.
- Credit card bills.
- Your monthly mortgage statement.
- Any utility bills, personal loans, and car payments.
The certified housing counselor will work with you and your lender to determine your options.
Freddie Mac Borrower Help Network
InCharge Debt Solutions has partnered with Freddie Mac in the mortgage giant’s nationwide Borrower Help Network. Does Freddie Mac own your mortgage? Visit Freddie Mac to find out. Call today to set up a free appointment.
Visit the Freddie Mac Avoiding Foreclosure Resource Center to find useful tips, tools, and educational resources, including information on what to expect when working with your servicer. Freddie Mac Borrower Help Centers are located in several cities throughout the United States.
Making Home Affordable Program
The Making Home Affordable Program provides a broad strategy to help struggling homeowners avoid foreclosure.
The Home Affordable Refinance Program (HARP) has been designed to give four-to-five-million homeowners loans, owned or guaranteed by Fannie Mae or Freddie Mac, an opportunity to refinance into more affordable monthly payments.
The Home Affordable Modification Program (HAMP), a response to the Great Recession, was active 2009-2018. The program has expired; lenders no longer accept applications for HAMP.
Foreclosure Assistance for FHA-Insured Homeowners
Part of HUD, the Federal Housing Administration (FHA) works energetically to halt and reverse foreclosure-related losses. Through its National Servicing Center (NSC), which offers assorted loss-mitigation programs and educational resources, the agency has the backs of FHA-insured homeowners facing financial hardship or unemployment whose mortgages are in, or at risk of, default.
NSC’s programs are available, as well, to home-equity conversion mortgage (HECM) borrowers.
FHA offers a variety of ways to get in touch.
- Call the National Servicing Center at (877) 622-8525.
- Call the FHA Outreach Center at (800) CALL FHA (800-225-5342).
- Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877-8339.
- Email the FHA Resource Center
- The Online FHA Resource Center
Foreclosure Assistance During COVID-19
Despite the widespread availability of free vaccinations against, and improving therapies to combat, COVID-19, the Delta-variant surge means these remain extraordinary times.
Already a player in the foreclosure-avoidance industry before COVID-19, HUD offers pandemic-specific relief for homeowners who qualify. Relief comes primarily in the form of forbearance, explained by the federal Consumer Financial Protection Bureau:
Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances.
For most loans, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to your account, and you do not need to submit additional documentation to qualify. You can simply tell your servicer that you have a pandemic-related financial hardship.
Under forbearance, your payments are neither forgiven nor erased. You remain obligated to repay any missed payments. In most cases, however, these may be repaid over time, or when you refinance or sell your home. Your servicer will contact you about how to catch up missed payments.
Application for pandemic-related forbearance is available through September 30, 2021.
Federal agencies are making flexibility, loss-mitigation, mortgage modification and other forms of relief available to homeowners through a variety of plans. Additionally, American Rescue Plan includes $9.961 billion appropriated to the states, D.C., territories and Tribes for relief to homeowners hammered by the pandemic.
CFPB encourages struggling homeowners to contact a foreclosure avoidance counselor, such as those at InCharge, to learn how to take advantage of COVID-19-related relief.
Q. How do I find out if I’m eligible for these programs?
Call InCharge Housing Counseling and speak to a certified housing counselor. You also can visit MakingHomeAffordable.gov and click the eligibility tab. It is useful to know if your loan is owned by one of the two government mortgage programs, Freddie Mac or Fannie Mae. Your mortgage company has the information, or you can check on your own, online or by phone:
Fannie Mae: (800) 232-6643 (8 a.m.-8 p.m. ET)
Freddie Mac: (800) 373-3343 (8 a.m.-8 p.m. ET)
Q. I’m behind on my mortgage by a couple of months and my lender has started calling asking about the status of my payments? What should I do?
Never (never, never) avoid speaking to your lender. Take their calls, describe your situation and explain why you are behind in payments. If the pandemic has taught us anything, it’s that some financial changes are inevitable, especially when they involve loss of employment, accidents and illness, or other major economic upheavals.
Ask your lender about the above programs to see if you may be eligible for a refinance or a modification.
You also can contact InCharge Debt Solutions Housing Counseling. After learning more about your situation, one of our certified housing counselors can contact your lender on your behalf.
Thanks to HUD-approved housing counseling agencies, including InCharge Debt Solutions, homeowners have an advocate. With the help of a no-fee housing counselor, you can learn how to avoid foreclosure, what steps to take when you are facing foreclosure, and how to avoid foreclosure scams.
A housing counselor also can help you navigate the housing terminology, complete the required paperwork, and work with your mortgage lender.
It’s not uncommon to feel alone and adrift in our battle to overcome the additional stressors brought on by the COVID-19 pandemic. That is why we believe it is vital for homeowners to know free, unbiased, professional, and certified education and assistance is available.
Find your lender’s name below to access required forms. If your lender is not listed, use InCharge Debt Solutions General.
Forms should be completed and returned to InCharge within 72 hours of your counseling session.
Email: [email protected]
Mail: 5750 Major BLVD., Suite 300, Orlando, FL 32819
Spot & Avoid Foreclosure Prevention and Loan Modification Scams
When financial stress creates fear and opportunity, scammers move in. There was plenty of fear to go around in 2020, prompting a surge in fraud in the field of foreclosure prevention, or mortgage relief, according to the Federal Housing Finance Agency (FHFA).
As explained repeatedly here, homeowners at risk of losing their dwellings have an abundance of free resources to help them avoid foreclosure. Alarm bells should clang in the heads of anyone who is contacted by someone who — for a fee — offers to negotiate a loan modification, or stop or delay a foreclosure.
“Of course, there are frauds that dupe people out of their money in the garb of counseling,” says Rasti Nikolic, a financial advisor with San Francisco-based LoanAdvisor. “It is easy to recognize them. They will constantly ask for upfront payments and guarantee you modification.”
Watch out for fraudulent calls, emails, or text messages from scammers claiming to represent Fannie Mae, Freddie Mac, banks or mortgage companies, nonprofits, or government officials peddling lower interest rates, foreclosure relief, delayed payment terms, or other loan modifications.
Any unsolicited contact about your mortgage should put you on high alert. Ask for credentials and a callback number. Check the credentials for the person and company (s)he claims to represent.
Decline any service that involves any sort of upfront payment.
Always maintain personal contact with your lender and mortgage servicer. Alert them to developments such as unsolicited offers of help from outsiders.
Enroll in a Foreclosure Prevention Program
Mortgage lenders really don’t want your house; during foreclosure, your American dream becomes their bottom-line burden. They’d far rather see your loan return to performing as described in your closing documents.
InCharge offers a HUD-certified foreclosure prevention service that will help you navigate your choppy financial seas. InCharge counselors know the ropes; they will help you explore each available option to help save your piece of the American dream.
About The Author
Tom Jackson focuses on writing about debt solutions for consumers struggling to make ends meet. His background includes time as a columnist for newspapers in Washington D.C., Tampa and Sacramento, Calif., where he reported and commented on everything from city and state budgets to the marketing of local businesses and how the business of professional sports impacts a city. Along the way, he has racked up state and national awards for writing, editing and design. Tom’s blogging on the 2016 election won a pair of top honors from the Florida Press Club. A University of Florida alumnus, St. Louis Cardinals fan and eager-if-haphazard golfer, Tom splits time between Tampa and Cashiers, N.C., with his wife of 40 years, college-age son, and Spencer, a yappy Shetland sheepdog.
- N.A. (ND) Avoid foreclosure. Retrieved from https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/help-for-homeowners/avoid-foreclosure/
- N.A. (ND) Foreclosure Prevention. Retrieved from https://www.occ.treas.gov/topics/consumers-and-communities/consumer-protection/foreclosure-prevention/index-foreclosure-prevention.html
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