Tips For Surviving the Foreclosure Crisis

By glblguy


Photo by: gruntzooki

This article originally appeared as a guest post on I’ve Paid For This Twice Already…

More than a million homes could potentially face foreclosure this year. This is 30% more than in 2006. People are panicking and looking for anyway out they can. Scammers are making the situation worse and taking advantage of people.

Here’s a few tips:

Know Your Rights

Read over your loan documents and papers. Look on your state’s website and learn about the foreclosure rights in your state.

Prioritize your spending

Review the life basics and pay for them first. Next to food and clothing, your home should be your next priority. Other debt collectors calling? They can wait.

Contact Your Lender

As soon as you have a problem paying your mortgage, contact your lender. Most want to help you keep your house as they don’t want the hassle of having to foreclose and sell the home. They’ll often work out a plan with you. If you lose your home, they lose too.

Call HUD

HUD, the Department of Housing and Urban Development offers free and low-cost counselors in addition to providing information on avoiding foreclosures. HUD is available at www.fha.gov or by calling 1-800-569-4287.

Respond to all mail or calls from your lender

If you receive mail from your lender, make sure you read it. Early letters often provide options or opportunities to discuss options with you lender. Make sure you take advantage of them. Later letters are legal notices and by that time the lender isn’t going to be too open to discussing options.

Avoid Scams

Don’t be fooled, you don’t have to pay a fee for foreclosure help and assistance. If some company claims they can stop you foreclosure, don’t sign anything and don’t believe it. Work with your lender not Foreclosures R Us.

In a common scam called “equity skimming” a so called “buyer” offer to repay the mortgage if you sign over your deed and move out. All you get is the mortgage in still in your name and no house. Don’t look for the short or easy way out.


8 Responses (including trackbacks) to “Tips For Surviving the Foreclosure Crisis”

  1. Kristen Says:

    Good post Gibble! I work for a non-profit credit counseling agency that also happens to be HUD-approved to offer housing counseling. I would like to offer one more bit of advice.

    If you happen to be in the unfortunate position of receiving a foreclosure notice, get help immediately! In Pennsylvania (and I assume other states), anyone who receives a foreclosure notice (aka an Act 91 notice) only has 30 days to contact an housing counseling agency, and that will also, at least temporarily, put a stop to any foreclosure proceedings. Way too often people will literally wait until 4 p.m. the day before their house is going to be foreclosed on to call for help, and then they are upset that we can’t always do the required counseling right then and there. Please take action as soon as you get a notice.

  2. Kristen Says:

    Sorry, I just realized this was a guest post! Kudos to “I paid for this twice already …”

  3. Dan Says:

    I would add this: Face the truth. If you are in danger of foreclosure, it could be an indication that you cannot afford the house you are in. While you are fighting for your house, you should be honestly asking yourself what is in your financial best interests. No one wants to sell and buy a condo, or even move into an apartment, but that’s just what you might have to do.

    Bottom line, if you are in danger, at least consider the cost of fighting and going through a foreclosure against the cost of selling and downsizing. It might be a smarter move to get out while the getting’s good.

  4. Watson Inc Says:

    I thought the part about contacting the lender could stand to be re-emphasized because so often people wait until it’s too late.

  5. "Mo" Money Says:

    Communicate with your lender as the post says, talk to them as soon as possible and try to work something out. They don’t want to foreclose on your house.

  6. Curious Cat Investment Blog Says:

    Good ideas. Also don’t get caught up in the hype. There really is only one things about saving yourself from foreclosure that is related to others facing foreclosure: that you might not be able to refinance out of an un-affordable loan. Your advice is true for someone facing that problem 4 years ago. The only real difference is more people are in that position today.

    I am pretty sure you can’t sign over “your deed” because you don’t have it. The banks that hold the mortgage don’t let themselves loose their collateral so easily. But you are correct that you have to be careful of fraud and as the sub-prime crisis, credit card company abuse, car financing abuse… have shown just because the company is huge and spends lots of money on happy commercials doesn’t mean they won’t try to rip you off.

  7. electric actuators Says:

    Interesting article. I need to read it again in order to digest all the information correctly!

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