If you are having trouble making your mortgage payments, have already fallen behind or are in default or foreclosure, you may feel scared, ashamed or overwhelmed. It is very important that you act quickly to communicate your situation clearly to your lender and reach out for the help you need. The longer you wait, the fewer options you may have to save your home or avoid foreclosure. Here are some tips on the steps to take if you find yourself in this situation:
The most important thing you can do when you’re having trouble paying your mortgage is take control. In most cases, the worst thing you can do is nothing.
Take control to avoid foreclosure If you’re worried you may fall behind on your mortgage or you are already behind, you can take action. The sooner you do it, the better. Here are some steps to help you and your family find out if you have options to avoid foreclosure.
Step 1: Make or take a call for help
Take control by accepting calls from your mortgage servicer. Even better, call your mortgage servicer as soon as you know you can’t make your monthly payment. The phone number is on your monthly bill. Tell your servicer why you can’t make your monthly payment and ask the servicer for help avoiding foreclosure.
Step 2: Ask for free expert help and Go to the Professionals, Avoid foreclosure prevention companies.
If you had a fire in your house, you’d call a professional firefighter. The same goes for a housing emergency.
Your servicer may be able to help if you get in trouble with your loan payments. If you can’t get what you need from your servicer, ask for expert help from housing counseling agencies near you. The counselors can develop a tailored plan of action and help you work with your mortgage company. Visit consumerfinance.gov/mortgagehelp or call (800) 569-4287 and enter your ZIP code, to find a HUD-approved housing counselor
Step 3: Slam the scam – Don’t lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately and if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.
Scam artists are trying to take advantage of homeowners who get into trouble by charging them thousands of dollars for false promises of help. You should not have to pay anyone to help you avoid foreclosure. The help you need may be available at no cost to you from your servicer, or through a HUD-approved housing counseling agency
Remember, the help you need is available at no cost to you through a HUD approved housing counseling agency.
Step 4: Apply for help
If you submit a complete application early enough, your mortgage servicer is required under the new rules to evaluate you for all the options available to you that might allow you to keep your home or leave your home if you prefer that option. Your loan servicer must contact you, provide you with accurate information, and tell you about loss mitigation options you may be eligible for. For example, lenders may offer programs to reduce monthly payments or lower a borrower’s interest rate.
But the mortgage servicer isn’t required to evaluate you if you don’t complete your application. If you finish your application for help, you also are protected from foreclosure while it is evaluated.
Get it done, and don’t delay. The earlier you complete the application, the more protections you will get
Loss mitigation refers to the ways your servicer can work with you to avoid foreclosure.
What options might be available?
Some options that your servicer might make available include:
- Get a loan modification
- Work out a repayment plan
- Get forbearance
- Short-sell your home
- Give your home back to your lender through a “deed-in-lieu of foreclosure”
TAKE AWAY : Your mortgage servicer can’t make a first notice or filing for foreclosure until you are more than 120days behind on your payments. In addition, when you submit a complete application for mortgage help early enough, the mortgage servicer can’t start foreclosure while you’re being evaluated or if you’re following through on the requirements of a loan modification. So get it done, and don’t delay. The earlier you complete the application, the more protections you get
Housing counselors have a lot of experience helping people work on avoiding foreclosure. They can assist you with the complicated steps to understand your options and apply for help.
Step 5: Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses–cable TV, memberships, entertainment–that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.
Step 6: Use your assets.
Do you have assets–a second car, jewelry, a whole life insurance policy–that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
Step 7: Stand up for your rights.
The CFPB accepts complaints about mortgages, so if you have a problem, you can submit a complaint to the CFPB. The CFPB will forward your complaint to the company and work to get you a response from them.
Submit a complaint at consumerfinance.gov/complaint or by calling (855) 411–2372 TTY/TDD (855) 729–2372.
You can learn more about your mortgage servicing
rights at consumerfinance.gov/mortgage.
How to spot a foreclosure scam
Foreclosure scammers might tell you they’ll save your home from foreclosure, when they’re really just taking your money.
Watch for these scam warning signs:
§ You’re asked to pay up front for help.
§ The company guarantees it will get the terms of your mortgage changed.
§ Guarantees to stop a foreclosure
§ You’re asked to sign over title to your home or to sign other documents you don’t understand.
§ You’re instructed to send your payment to someone other than your mortgage company or servicer.
§ The company offers to do a “forensic audit.”
§ You’re told to stop paying your mortgage.
§ The company says they’re affiliated with the government, or uses a logo that looks like a government seal but is
If it sounds too good to be true, it probably is. If you feel you may be the target or victim of foreclosure fraud, trust your instincts and seek help. For tips on spotting scam artists, visit the Federal Trade Commission’s webpage on foreclosure rescue scams (www.ftc.gov/bcp/edu/pubs/consumer/credit/cre42.shtm). Report suspicious schemes to your state and local consumer protection agencies, which you can find on the Federal Citizen Information Center’s
Consumer Action Website (www.consumeraction.gov/caw_state_resources.shtml).
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The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.