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    Tips for Avoiding Foreclosure

    Are you having trouble keeping up with your mortgage payments?Have you received a

    notice from your lender asking you to contact them?

    • Don't ignore theletters from your lender

    • Contact your lenderimmediately

    • Contact a HUD-approvedHousing Counseling Agency

    • Toll FREE (800)569-4287

    • TTY (800) 877-8339

    If you are unable to make your mortgage payment:

    1. Don't ignore the problem.

    The further behind you become, the harder it will be toreinstate your loan and the more

    likely that you will lose your house.

    2. Contact your lender as soon as you realize that you have aproblem.

    Lenders do not want your house. They have options to helpborrowers through difficult

    financial times.

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

    The first notices you receive will offer good information aboutforeclosure prevention options

    that can help you weather financial problems. Later mail mayinclude important notice of

    pending legal action. Your failure to open the mail will not bean excuse in foreclosure court.

    4. Know your mortgage rights.

    Find your loan documents and read them so you know what yourlender may do if you can't

    make your payments. Learn about the foreclosure laws andtimeframes in your state (as

    every state is different) by contacting the State GovernmentHousing Office.

    5. Understand foreclosure prevention options.

    Valuable information about foreclosure prevention (also calledloss mitigation) options can

    be found on the internet at www.fha.gov/foreclosure/index.cfm.

    6. Contact a HUD-approved housing counselor.

    The U.S. Department of Housing and Urban Development (HUD) fundsfree or very low cost

    housing counseling nationwide. Housing counselors can help youunderstand the law and

    your options, organize your finances and represent you innegotiations with your lender if

    you need this assistance. Finda HUD-approved housing counselor near you orcall (800)

    569-4287 or TTY (800) 877-8339.

    7. Prioritize your spending.

    After healthcare, keeping your house should be your firstpriority. Review your finances and

    see where you can cut spending in order to make your mortgagepayment. Look for optional

    expenses-cable TV, memberships, entertainment-that you caneliminate. Delay payments

    on credit cards and other 'unsecured' debt until youhave paid your mortgage.

    8. Use your assets.

    Do you have assets-a second car, jewelry, a whole life insurancepolicy-that you can sell for

    cash to help reinstate your loan? Can anyone in your householdget an extra job to bring in

    additional income? Even if these efforts don't significantlyincrease your available cash or

    your income, they demonstrate to your lender that you arewilling to make sacrifices to

    keep your home.

    9. Avoid foreclosure prevention companies.

    You don't need to pay fees for foreclosure prevention help-usethat money to pay the

    mortgage instead. Many for-profit companies will contact youpromising to negotiate with

    your lender. While these may be legitimate businesses, they willcharge you a hefty fee

    (often two or three month's mortgage payment) for informationand services your lender or

    a HUDapproved housing counselor will providefree if you contact them.

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

    If any firm claims they can stop your foreclosure immediately ifyou sign a document

    appointing them to act on your behalf, you may well be signingover the title to your

    property and becoming a renter in your own home! Never sign alegal document without

    reading and understanding all the terms and getting professionaladvice from an attorney, a

    trusted real estate professional, or a HUDapproved housing counselor.

    Losing a home can be financially and personally devastating.Here's information to help you

    keep your home. Relief may be available.

    • People facing moneyproblems:

    If you are facing unemployment or have money problems, you maybe able to keep your

    home if you know the right steps to take. Read on for importantinformation and links to

    local organizations that can help you get through difficulttimes without losing your

    home. Government organizations and the mortgage industry workedtogether to provide

    this information to help you keep your home.

    • Disaster areavictims:

    If you live or work in an area declared a disaster by thePresident and the hurricane,

    tornado, flood, wildfire, or other natural or man-made eventdamaged your home or

    reduced your income, your lender will provide disaster relief:

    • For 90 days on anFHA-insured loan. Go to the Disaster Help from the button on

    the left of this page.

    • In most cases for otherloans.

    • Military personneland spouses:

    If you or your spouse is on active military duty, you mayqualify for a reduction in your

    interest rate resulting in lower payments. Read how the ServicemembersCivil Relief Act

    of 2003 (formerly the Soldiers' and Sailors' Civil Relief Act of1940) affects military

    homeowners.

    Facing Money Problems: - (Top)

    Financial problems are most often associated with major lifechanges like:

    • Job loss

    • Cuts in work hours orovertime

    • Retirement

    • Illness, injury, ordeath of a family member

    • Divorce or separation

    If your family is facing any of these issues and you can't payyour bills, look closely at what you

    owe and what you earn. Eliminate unnecessary spending and reachout for help if you still can't

    make ends meet. Taking action right away can help you protectyour family from the loss of your

    home.

    Steps to take when you can't pay your mortgage: - (Top)

    Contact your lender as soon as you have a problem

    Talk to a housing counselor

    Prioritize your debts

    Explore loan workout solutions with your lender

    If keeping your home is not an option

    Beware of predatory lending schemes

    1. Contact your lender as soon as you have a problem -(Top)

    Many people avoid calling lenders about money troubles becausewe:

    • Feel embarrasseddiscussing money problems with others

    • Believe that if lendersknow we are in trouble, they will automatically rush to a

    collection agency or foreclosure (seize property for failure topay a mortgage

    debt)

    But lenders want to help borrowers keep their homes because:

    • Foreclosure is expensivefor lenders, mortgage insurers and investors

    • HUD and private mortgageinsurance companies and investors like Freddie Mac

    and Fannie Mae require lenders to work aggressively to helpborrowers facing

    money problems

    Lenders have workout options (choices) to help you and:

    • These options work bestwhen your loan is only one or two payments behind

    • The farther behind youare on your payments, the fewer options are available

    Don't assume that your problems will quickly correct themselves:

    • Don't lose valuable timebeing overly optimistic

    • Contact your mortgagelender to discuss your circumstances as soon as you

    realize that you're unable to make your payments

    • Look forward to yourlender being willing to explore many possible solutions,

    without guaranteeing any one particular solution

    Finding your lender

    Check the following sources to contact your lender:

    ? Your monthly mortgagebilling statement

    ? Your payment coupon book

    Information to have ready when you call

    To help you, lenders usually need:

    ? Your loan account number

    ? A brief explanation ofyour circumstances

    ? Recent income documents:

    • Pay stubs

    • Benefit statements fromSocial Security, disability, unemployment,

    retirement, or public assistance

    • Tax returns or ayear-to-date profit and loss statement, if selfemployed

    • A list of householdexpenses

    Expect to have more than one phone conversation with yourlender. Typically,

    your lender will mail you a 'loan workout' package.This package contains

    information, forms and instructions. If you want to beconsidered for assistance

    you must complete the forms fully and truthfully and return themto your lender

    quickly. Your lender will review the complete package beforetalking about a

    solution with you.

    CALL YOUR LENDER TODAY! The sooner you call, the sooner help isavailable.

    Don't ignore mail from your lender

    If you don't get in touch with your lender, your lender will tryto contact you by mail and

    phone soon after you stop making payments. It is very importantthat you respond to mail

    and phone calls offering help. If your lender doesn't hear fromyou, they will have to start

    legal action leading to foreclosure. This will greatly increasethe cost to bring your loan

    current.

    Information for families with FHA loans

    The FHA provides many alternatives and ways for borrowers to gethelp. These may

    include mortgage modifications (changes), special forbearances(allowances), and other

    actions you can take to avoid foreclosure.

    FHA works closely with customers who have FHA-insured loans. Doyou feel your

    lender is not responding to your questions? Do you need helpcontacting your lender?

    The FHA is ready to help! Contact us at (800) CALL-FHA.

    2. Talk to a housing counselor -(Top)

    If you don't feel comfortable talking with your lender, youshould immediately contact a

    housing counseling agency and make an appointment with acounselor. Most FHA

    counselors are free or cost very little. A counselor can helpyou:

    • Review your financialsituation, determine what options are available to you, and

    negotiate with your lender

    • Learn which of thevarious workout arrangements lenders consider makes the

    most sense for you and your family, based on your circumstances

    • Call the lender with youor on your behalf to discuss a workout plan

    • Protect you from futurecredit problems before you get too far behind on

    mortgage payments

    • Give you information onservices and programs in your area that provide

    financial, legal, medical or other assistance

    A good counselor will help you create a monthly budget plan toensure you meet all your

    monthly expenses, including your mortgage payment. Your personalfinancial plan will

    clearly show how much money you have available to make themortgage payment. This

    analysis will help you and your lender determine whether areduced or delayed payment

    schedule could help you.

    To find out more about HUD-approvedhousing counseling agencies and theirservices,

    please call toll free (800) 569-4287 on weekdays between 9:00a.m. and 5:00 p.m.

    Eastern Standard Time (6:00 a.m. to 2:00 p.m. Pacific Time). Thesame number can give

    you an automated referral to the three housing counselingagencies located closest to you.

    Many of these local housing counseling agencies are connectedwith national and

    regional housing counseling intermediaries (mediators). Thewebsite for HUD-approved

    National and Regional Housing Counseling Intermediaries describesthe full range of

    assistance offered and provides maps showing their member'slocations.

    3. Prioritize your debts (rank them by importance) -(Top)

    You will need a new, tightened budget if you lose a job.Prioritize your bills and pay

    those most necessary for your family: food, utilities andshelter.

    Failing to pay any of your debts can seriously affect yourcredit rating, but if you stop

    making your mortgage payments you could lose your house. Trythese suggestions to

    keep your home:

    • Whenever possible, useany income available after paying for food and utilities to

    pay your monthly mortgage payments.

    • If your employmentincome has stopped or been reduced, first consider getting rid

    of or cutting back on other expenses (such as dining out,entertainment, cable, or

    even telephone services).

    • If you still do not haveenough income, consider cashing out other financial

    resources like stocks, savings accounts, or personal propertythat may have value

    like a boat or a second car.

    • Take any responsibleaction that will save cash.

    Besides speaking with your lender, you may want to contact anonprofit consumer credit

    counseling agency that specializes in helping restructure creditpayments. Credit

    counselors can often reduce your monthly bills by negotiatinglower payments or longterm

    payment plans with your creditors. Trustworthy credit counselingagencies provide

    their services free of charge or for a small monthly fee tied toa repayment plan. Beware

    of credit counseling agencies that offer counseling for a largeupfront fee or donation.

    For consumer debt advice, contact www.debtadvice.org/

    When you call a credit counseling agency, they will ask you toprovide current

    information about your income and expenses. Make sure you ask ifthe agency has a

    charge before you sign any documents!

    Preserve your good credit

    Do not underestimate (misjudge) how important it is to keep yourgood

    credit. Your future ability to purchase items, rent or buy ahome, and do

    other things often requires a credit check. Consumer creditagencies and

    your lender can help you explore solutions to keep your creditrating from

    getting blemished.

    Maintaining good credit is even important for job hunters. Whenyou

    apply for a job, the employer probably will check your creditreport to

    determine whether:

    • You have been sued

    • You have filed forbankruptcy

    • You have trouble payingyour bills

    4. Explore loan workout solutions with your lender -(Top)

    First and foremost, if you can keep your mortgage current, doso.

    But if you find you are unable to make your mortgage payments,you might qualify for a

    loan workout option. Check with your lender to see which optionmay be available. Some

    options may not apply to your loan if it is not insured by FHA.

    If your problem is temporary - call your lender to discuss thesepossibilities:

    • Reinstatement: Yourlender is always willing to discuss accepting the total

    amount owed in a lump sum by a specific date. Forbearance mayaccompany this

    option.

    • Forbearance: Yourlender may allow you to reduce or suspend payments for a

    short period of time and then agree to another option to bringyour loan current. A

    forbearance option is often combined with a reinstatement whenyou know you

    will have enough money to bring the account current at aspecific time. The

    money might come from a hiring bonus, investment, insurancesettlement, or tax

    refund.

    • Repayment plan: Youmay be able to get an agreement to resume making your

    regular monthly payments, plus a portion of the past duepayments each month

    until you are caught up.

    If it appears that your situation is long-term or willpermanently affect your ability

    to bring your account current - call your lender to discussoptions:

    • Mortgagemodification: If you can make paymentson your loan, but don't have

    enough money to bring your account current or you can't affordyour current

    payment, your lender may be able to change the terms of youroriginal loan to

    make the payments more affordable. Your loan could bepermanently changed in

    one or more of the following ways:

    • Adding the missedpayments to the existing loan balance.

    • Changing the interestrate, including making an adjustable rate into a fixed

    rate.

    • Extending the number ofyears you have to repay.

    • Partial Claim: Ifyour mortgage is insured, your lender might help you get a onetime

    interest-free loan from your mortgage guarantor to bring youraccount

    current. You may be allowed to wait several years beforerepaying this loan. You

    qualify for an FHA partial claim if:

    • Your loan is between 4and 12 months delinquen

    • You are able to beginmaking full mortgage payments again

    When your lender files a partial claim, HUD will pay your lenderthe amount necessary

    to bring your mortgage current. You must sign a promissory note,and a lien will be

    placed on your property until the promissory note is paid infull.

    The promissory note is interest-free and is due when you pay offthe first mortgage or

    when you sell the property.

    If keeping your home is not an option - call your lender todiscuss these possibilities:

    - (Top)

    • Sale: Ifyou can no longer afford your home, your lender will usually give you a

    specific amount of time to find a purchaser and pay off thetotal amount owed.

    You will be expected to use the services of a real estateprofessional who can

    aggressively market the property.

    • Pre-foreclosure saleor short payoff: If you can't sell theproperty for the full

    amount of the loan, your lender may accept less than the amountowed. Financial

    help may also be available to pay other lien holders and/or helptowards some

    moving costs. You may qualify if:

    • The loan is at least 2months delinquent

    • You (or your real estateprofessional) can sell the house within 3 to 5

    months

    • A new appraisal(obtained by your lender) shows that the value of your

    home meets HUD program guidelines

    • Assumption: Aqualified buyer may be allowed to take over your mortgage, even

    if your original loan documents state that it is non-assumable.

    • Deed-in-lieu offoreclosure: As a last resort, you'give back' your property and

    the debt is forgiven. This will not save your house, but it isless damaging to your

    credit rating. This option might sound like the easiest way out,but it has

    limitations:

    • You usually have to tryto sell the home for its fair market value for at

    least 90 days before the lender will consider this option

    • This option may not beavailable if you have other liens, suc h as other

    creditor judgments, second mortgages, and IRS or state tax liens

    Resources for finding a real estate agent and selling your home

    If you need to sell your home, you'll have to answer manyquestions. You'll need to find how

    much your house is actually worth, and you'll have to find areal estate agent you are comfortable

    with. The following resources may help:

    • NationalAssociation of Realtors

    • NationalAssociation of Real Estate Brokers

    • InternationalReal Estate Digest

    • NationalAssociation of Hispanic Real Estate Professionals

    • The HomeStore

    If you have an FHA-insured loan and your lender is notresponsive

    Your lender has to follow FHA servicing guidelines andregulations for FHA-insured loans. If

    your lender is not cooperative, contact FHA's National ServicingCenter at toll free (888) 297-

    8685 or via email hsg-lossmit@hud.gov.HUD does not oversee VA or conventional loans.

    Beware of predatory lending schemes -(Top)

    Most mortgage lenders are trustworthy and provide a valuableservice by allowing families to

    own a home without saving enough money to buy it outright. Butdishonest or 'predatory'

    lenders do exist and engage in lending practices that increasethe chances that a borrower will

    lose a home to foreclosure. Beware especially of those who makehigh risk second mortgages.

    Other abusive practices include:

    • Making a mortgage loanto an individual who does not have the income to repay it

    • Charging excessiveinterest, points and fees

    • Repeatedly refinancing aloan without providing any real value to the borrower

    Borrowers facing unemployment and/or foreclosure are oftentargets of predatory lenders

    because they are desperate to find any 'solution'.

    Homeowners receive many refinance offers in the mail saying theyare 'pre-approved' for credit

    based on the equity in their homes. Borrowing against your housemay seem attractive when you

    are struggling to pay your mortgage and other bills. But stopand think about this: if you can't

    make your current payments, increasing your debt will make itharder to keep your home, even if

    you get some temporary cash.

    Beware of scams

    • Equity skimming: In thistype of scam a 'buyer' approaches you offering to repay the

    mortgage or sell the property if you sign over the deed and moveout - usually leaving

    you with the debt and no house. Signing over your deed does notnecessarily relieve you

    of the responsibility of paying the loan.

    • Phony counselingagencies: charging for counseling that is often free of charge. If you

    have any doubt about paying for such services, call aHUD-approved foreclosure housing

    counseling agency toll freeat (800) 569-4287 orTDD (800) 877-8339 beforeyou pay

    anyone or sign anything.

    • Do not sign anything youdo not understand. It is your right and duty to ask questions

    • Information is your bestdefense against becoming a victim of predatory lending,

    especially for a desperate homeowner

    Where to report suspected predatory lending

    Homeowners can either visit the StopMortgage 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:

    • FreddieMAC's Predatory Lending

    • FreddieMAC's 'Don't Borrow Trouble'

    Common Questions - (Top)

    What happens when I miss my mortgage payments?

    What should I do?

    Who is my lender? How do I make contact?

    I don't remember what type of mortgage I have.

    Do I need to keep living in my house to qualify for assistance?

    My employer has already announced layoffs

    What are the key points to remember?

    What precautions can I take?

    Will I be responsible for any out-of-pocket expenses?

    What happens when I miss my mortgage payments? -(Top)

    Foreclosure may occur. This means your lender can legallyrepossess (take over) your home.

    When this happens, you must move out of your house. If yourproperty is worth less than the

    total amount you owe on your mortgage loan, a deficiencyjudgment could be pursued, meaning

    you would not only lose your home, you also would owe HUD money.

    Both foreclosures and deficiency judgments could seriouslyaffect your ability to qualify for

    credit in the future. So you should avoid foreclosure if at allpossible.

    What should I do? - (Top)

    • Do not ignore lettersfrom your lender. If you are having problems making your

    payments, call or write to your lender's loss mitigationdepartment immediately. Explain

    your situation. Be prepared to provide financial information,such as you-r monthly

    income and expenses. Without this information, they may not beable to help.

    • Stay in your home fornow. You may not qualify for assistance if you abandon your

    property.

    • Contact a HUD-approvedforeclosure housingcounseling agency. Call toll free 1-800-

    569-4287 or TDD(800) 877-8339 for the housingcounseling agency nearest you. These

    agencies are valuable resources. They have information onservices and programs offered

    by government agencies and private and community organizationsthat might be able to

    help you. The housing counseling agency may also offer creditcounseling. These

    services are usually free of charge.

    Who is my lender? How do I make contact?-(Top)

    Look at your monthly mortgage coupons or billing statements forthe lender's name and contact

    information.

    I don't remember what type of mortgage I have. How can I findthis information? - (Top)

    Look on the original mortgage documents or call your mortgagelender.

    Do I need to keep living in my house to qualify for assistance? -(Top)

    Usually yes, but call your lender to discuss your specificcircumstances and get advice on options

    that may be available.

    My employer has already announced layoffs in the coming month.What can I do now? -

    (Top)

    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 whereyou 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 stillbelieve you will have trouble

    making your mortgage payments, contact your lender right away.

    What are the key points to remember? -(Top)

    1. Don't lose your home and damage your credit history

    2. Call or write your mortgage lender immediately and be honestabout your financial

    situation

    3. Stay in your home to make sure you qualify for assistance

    4. Arrange an appointment with a HUD-approvedhousing counselor to explore your

    options toll free at (800)569-4287 or TDD(800) 877-8339

    5. Cooperate with the counselor or lender trying to help you

    6. Explore every alternative to keep your home

    7. Beware of scams

    8. Never sign anything you don't understand. And remember thatsigning over the deed to

    someone else does not necessarily relieve you of your loanobligation

    9. Act now. Delaying can't help. If you do nothing, you willlose your home and your good

    credit rating!

    What precautions can I take? -(Top)

    These precautions can help you avoid being 'taken' bya scam artist:

    • Don't sign any papersyou don't fully understand.

    • Make sure you get all'promises' in writing.

    • Beware of any salescontract that assumes the loan where you are not formally released

    from liability (responsibility) for your mortgage debt.

    • Check with a lawyer oryour mortgage company before entering into any deal involving

    your home.

    If you're selling the house yourself to avoid foreclosure, checkto see if there are any complaints

    against the prospective buyer. You can contact your state'sAttorney General, the State Real

    Estate Commission, or the local District Attorney's ConsumerFraud Unit for this type of

    information.

    Will I be responsible for any out-of-pocket expenses if I amapproved for a workout

    option? - (Top)

    You may have to pay expenses such as recording fees for a loanmodification. Because every

    situation is different, contact your lender for moreinformation. But, if a lender has no contact

    with you and has to start foreclosure, you may have to pay veryhigh legal fees. To avoid this,

    call your lender as soon as you realize you might have trouble.

    Mortgage lenders

    The mortgage lenders listed below have voluntarily joined thefederal government to assist

    homeowners who are concerned about the future or have suffereddue to recent changes in the

    economy. If your lender is listed here, you can help protectyour home by contacting them

    immediately!

    Lender Phone #1 Phone #2

    Bank of America (800) 846-2222 (716) 635-2264

    Chase Home Finance (800) 848-9136

    Chase Home Finance (800) 526-0072

    ext. 533 (800) 527-3040

    CitiMortgage (800) 926-9783

    Countrywide (800) 763-1255 (800) 669-4576

    HSBC Mortgage Corporation (800)338-6441 (888) 648-3124

    Irwin Mortgage Corporation (888) 444-6446

    James B. Nutter & Company (800) 315-7334

    Midland Mortgage (800) 552-3000 (800) 654-4566

    Mortgage Service (800) 449-8767

    National City Mortgage (800)367-9305

    Nationwide Advantage Mortgage (800) 356-3442

    ext. 6002

    Principal Residential Mortgage, Inc. (800) 367-6448 (800)962-4450

    Wells Fargo Mortgage (800) 766-0987

    Wendover Financial Services Corporation (888) 934-1081 (800)436-1022

    Washington Mutual Home Loans, Inc. (866) 926-8937 (800) 254-3677

    This information is provide for you by the joint efforts ofHUD/FHA, Department of Veterans

    Affairs, Department of Labor, Fannie Mae, Freddie Mac, membersof the Mortgage Industry-atlarge,

    and other industry participants.

    Servicemembers Civil Relief Act (SCRA) Common Questions - (Top)

    Who is eligible?

    Am I entitled to debt payment relief?

    Is the interest rate limitation automatic?

    Am I eligible even if I can afford to pay my mortgage at ahigher interest rate?

    What if I can't afford to pay my mortgage even at the lowerrate?

    Am I protected against foreclosure?

    What in

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