Q: What Are My Alternatives?

If you are facing the possibility of foreclosure you may be considered for the following:

• Special Forbearance  Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments.  You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses.  You must furnish information to your lender to show that you would be able to meet the requirements of the new payment plan.
• Mortgage Modification  You may be able to refinance the debt and/or extend the term of your mortgage loan.  This may help you catch up by reducing the monthly payments to a more affordable level.  You may qualify if you have recovered from a financial problem and can afford the new payment amount.
• Partial Claim (FHA Loans)  Your lender may be able to work with you to obtain a one-time payment from the FHA-insurance fund to bring your mortgage current.  If you are between 4-12 months delinquent but can afford the regular monthly mortgage payment you may get a loan (a lien on your property with 0 payments, 0% interest) to bring your mortgage current.  This lien must be paid off when you refinance or sell your home.
• Pre-Foreclosure Sale (Short sale)  This will allow you to avoid foreclosure by selling your property for an amount less than is necessary to pay off your mortgage loan.
• Deed-in-Lieu-of Foreclosure  As a last resort, you may be able to voluntarily “give back” your property to the lender.  This won’t save your house, but it is not as damaging to your credit rating as a foreclosure.  In order to qualify for this option you must be delinquent on your mortgage, not qualify or be successful with any other work out option and only have one (1) mortgage on your home.

For more information on Foreclosure Prevention visit www.hud.gov or www.CommunityActionUC.org. To find a FREE HUD-approved housing counselor to explore your options call 1-800-569-4287 (TDD 1-800-877-8339).