TIPS to Avoid Foreclosure:

 Having trouble paying your mortgage? Help is just a phone call away.Tips to Avoid Foreclosure 

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 Hundreds of thousands of families behind on their mortgage could avoid foreclosure by acting quickly and reaching out to their lender or a reputable nonprofit. Here are some tips to keep in mind.
How should I avoid mortgage trouble?Prioritize your expenses. Prioritize your bills and pay the ones that are most necessary for the well-being of you and your family, such as shelter, food, and utilities.Protect your credit score. When you are experiencing a financial challenge, remember that making late payments or skipping them can seriously affect your credit score.Beware of scams. Beware of predatory lenders, pre-approved loan offers, and phony counseling agencies. Homeowners facing financial troubles are especially vulnerable because they are desperate to find a solution to their problems. Legitimate counseling agencies will offer their programs for free or for a small administrative charge. Check with a lawyer or your mortgage company before signing anything involving your home. Do not sign anything you do not understand. The U.S. Department of Housing and Urban Development has more information about avoiding predatory lending on their website, should I do if I miss a mortgage payment?

Call for help—it’s the most important thing you can do. More than half of homeowners facing foreclosure did not call for help when they fell behind in their mortgage payments.

Don’t make a bad situation worse. Ignoring your situation won’t make it go away. Take the steps provided in this sheet to protect your home, your family, and your credit rating.

Notify the bank as soon as you know your payment will be late. Calling when you are 30 or 60 days late is better than calling when you are 120 days late. You still have some options. You must put your pride on hold if you’re truly serious about stopping the foreclosure process. Remember that foreclosure is not in the best interest of lenders—lenders report that it costs up to $50,000 or almost half the loan balance each time they write off a foreclosure.

Work it out. Depending on the situation, the lender may lower the interest rate, lower the borrower’s monthly payment, or enter into a repayment agreement for missed payments.

Avoid foreclosure rescue scams by calling a reputable nonprofit organization. The Homeowner’s HOPE Hotline, available at, (888) 888-995-HOPE, is an independent, third-party resource that is part of a HUD-certified, not-for-profit network dedicated to helping homeowners. HOPE counselors are trained to set up a plan of action designed just for you and your situation. (Spanish speaking counselors are also available; llame español.) When you call HOPE for Homeowners, you won’t be judged, you won’t pay a dime, and most of all, you won’t be disappointed.

What are my options if I cannot make payments?

Forbearance. You are allowed to delay payments for a short period, with the understanding that another option will be used afterwards to bring the account current.

Reinstatement. When you are behind in your payments but can promise a lump sum to bring payments current by a specific date.

A Repayment Plan. If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past due amount to each current monthly payment until your account is current.

Modifying Your Mortgage. The lender can modify your mortgage to extend the length of your loan (or take other steps to reduce your payments). One solution is to add the past due amount into your existing loan, financing it over a long term.

Selling Your Home. If catching up on payments is not possible, the lender might agree to put foreclosure on hold to give you some time to attempt to sell your home.

Property Give-Back. The lender can allow you to give-back your property – and then forgive the debt. Give-backs do, however, have a negative impact on your credit record, although not as much as a foreclosure. The lender might require that you attempt to sell the house for a specific time period before agreeing to this option, and it might not be possible if there are other liens against the home.

How can I reduce the risk of foreclosure when I purchase or refinance my home?

Take advantage of prepurchase counseling offered by not-for-profit organizations. Homeowners can avoid trouble later on by making informed decisions while purchasing their homes. Borrowers who are most likely to keep their homes understand their mortgage options and how much they can really afford. Education also helps borrowers identify and avoid unscrupulous sellers or lenders. A recent study found that borrowers who received counseling have half the default risk as those who did not.

Avoid prepayment penalties and balloon payments. People who refinance their mortgages with loans containing prepayment penalties or balloon payments are more likely to undergo foreclosure, according to a study by researchers at the University of North Carolina. According to the study, a prepayment penalty increases foreclosure risk by about 20 percent. Mortgages with balloon payments were 46 percent more likely to go to foreclosure than loans without. Protect the equity in your home – it’s a valuable source of wealth that will build over time.

Stay on top of home repairs and maintenance. NeighborWorks® organizations provide counseling in home maintenance and repairs and rehabs that improve the value of a home. Too often emergency repairs and less-than-trustworthy contractors push a homeowner into foreclosure.




  1. Because of an increase of loan scames, each time some loan modification person or agency calls you, get their name and phone number right awasy. Also, ask if they have any website. Please do not give any personal information over the phone unless you verify who they are. Make sure you call them back to verify the phone and the right name and extension of person who initially contacted you.

  2. Words from an Opinionated California Lawyer

    In California, the Department of Real Estate website ( lists the companies that have DRE “permission” to modify loans… add to this list any licensed California attorney, and that is where you should begin your due diligence when you seek help in California. Other states probably have similar laws, so check with your own state DRE.

    My law firm has been getting more and more calls recently from homeowners that were victims of predatory lenders who put them into an unaffordable loan and now fell into the hands of those same people who sold the toxic loans but profess to be saviors… DON’T BE A VICTIM TWICE!

    Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call “home.” These scammers are popping up like dandelions on a freshly mowed lawn. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere. Make no mistake, in many cases, these are the exact same loan officers and mortgage brokers who fleeced homeowners the first time around. After losing their jobs with the crash of the mortgage industry, they have found a new way to make ill-gotten profits from hard-working homeowners through loan modifications.

    In California, with very few exceptions (and attorneys are one exception), it is against the law for anyone to take money up front for helping a homeowner who is in default. Don’t trust a company that begins its relationship with you by breaking the law.

    Of course, this is one lawyer’s biased opinion, but one based on many distressing calls to my office every day. And, yes, my firm does take cases against loan modification companies who have violated laws. This field is quickly becoming one of the fastest growing sections for our mortgage law firm.

    – Paul J. Molinaro, Esq.

    • Has the banks slowing down their modification plans? This is the most frustrating time when the governments are chaning, and no one seems to be the inchrage. Obama said it more than one time that there should be only president at a time. That is true. But it seems there is no president when it comes to home foreclosure and loan modifications? The banks had taken the governmental money and are doing what they used to do before? Shamelessly, they are saying NO to many of the deserving and needy people.

  3. Paul:
    I agree with you on this. This foreclosure is a multi-headed crisis which unfortunately is engulfing majority of us. There is no distinction anymore of middle class or lower middle class. The same kind of people who were responsible for this crisis in the first place, are coming back in different guise to lure people and take their money and make mockery of their miseries. We need to stop that. So, I answer lots of questions via email to anyone who had some issues. They are also welcome to my office for a free consultation. Please folks, don’t be afraid of your rights, and open your mail all the time, and take timely action. Once your home is foreclosed, it becomes difficult to contest your rights. It is good to talk to an attorney right away. If you need help regardless of yoru delinquency status, get involved a licensed attorney. Lenders are afraid of them because attorneys are very familiar with all kinds of issues and foreclosures, and lenders wants a quick foreclosure and get rid of the delinquent borrowers. In fact, they are still creating all kinds of road block to stop loan modification.

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