Beware of scams!  Solutions that sound too simple or too good to be true usually are.  If you’re selling your home without professional guidance, beware of buyers who try to rush you through the process.  Unfortunately, there are people who may try to take advantage of your financial difficutly.  Be especially alert to the following:

Equity skimming  In this type of scam, a “buyer” approaches you , offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold.  The “buyer” may suggest that you move out quickly and deed the property to him or her.  The “buyer” then collects rent for a time, does not make any mortgage payments, and allows the lender to foreclose.  Remember, signing over your deed to someone else does not relieve you of your obligation to pay on your loan.

Hint: Do not sign over your deed or sell your property with a “proper” closing.  And always have payments made to a third party escrow company to insure that the payments are made as agreed.

Phony Counseling Agencies  Some groups calling themselves “counseling agencies” may approach you and offer to perform certain services for a fee.  These could well be services you could do for yourself for free, such as negotiating a new payment plan with your lender, or pursuing a pre-foreclosure sale.  If you have any doubt about paying for such services, call a HUD-approved housing counseling agency at 1-800-569-4287 or TDD 1-800-877-8339.  Do this before you pay anyone or sign anything.

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).

Your lender will determine if you qualify for any of the alternatives.  A housing counseling agency can also help you determine which, if any, of these options may meet your needs and also assist you in interacting with your lender.  Most services are provided FREE of charge.

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).

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).

1. Do Not Ignore The Letters From Your Lender!  If you are having problems making your payments, call or write to your lender’s “Loss Mitigation Department” without delay.  Explain your situation.  Be prepared to provide them with financial information, such as your monthly income and expenses.  Without this information, they may not be able to help.
2. Stay in your home for now.  You may not qualify for assistance if you abandon your property.
3. Contact a HUD-approved housing counseling agency.  Call 1-800-569-4287 or TDD 1-800-877-8339 for the housing counseling agency nearest you.  These agencies are valuable resources.  They frequently have information on services and programs offered by Government agencies as well as private and community organizations that could help you.  The housing counseling agency may also offer credit counseling.  These services are usually free of charge.

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).

Foreclosure may occur.  This is the legal means that your lender can use to reposses (take over) your home.  When this happens, you must move out of your house.  If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued.  If that happens, you not only lose your home, you also would owe your lender an additional amount.

Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future.  So you should avoid foreclosure if possible.

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).