Behind in your mortgage? Actions you can take to save your home.
It is important to know that your mortgage company would always prefer to keep you in your home rather than foreclose. They are in the business of providing mortgages, not owning or selling homes. It is in your best interest to talk to a counselor, a lawyer, or contact your mortgage company directly so you can keep your home.
- Talk to a housing counselor
Look for a HUD certified counselor. The Department of Housing and Urban Development has trained and certified loan counselors who will assist you free of charge and can negotiate with the mortgage company’s representative or “servicer” on your behalf. Servicers are often permitted by the agreements governing loans to renegotiate your loan terms, a process known as “work-out” or “loss mitigation.” This process may reduce your monthly payments, give you a few months without loan payments, delay payment of arrears or make it possible to otherwise change the payments on your home loan.
The Department of Housing and Urban Development’s Web Site www.hud.gov/foreclosure , has a nationwide directory of counseling agencies, or you can call them at (800) 569-4287. Services are free. Advice is also available at the Homeowners Hop Hot-line at (888) 995-HOPE.
- Contact a Lawyer
If you were misled or not fully informed by a broker or mortgage company about the terms of the loan, you might be able to “rescind” (cancel) the loan. You may also be entitled to damages. If you cannot afford a lawyer, call your local Bar Association of Legal Aid office and ask them to refer you to a lawyer. Contact information for local Legal Aid Societies can be found at www.dca.ca.gov/publications/guide/legal_index.shtml .
- Call your mortgage company
Ask for the “loss-mitigation” or “work-out” department and try to modify the loan terms. Be smart about modifying your loan. Many properties are worth less than the mortgages they secure; it is in your best interests to keep a property that is worth less than your mortgage? Be realistic about whether you can make the “modified” payments. Keep in mind that most modification documents contain a “waiver”. That means when you sign the modification documents you give up any legal rights you may have and you give up the right to take your mortgage company to court. Before you sign ANYTHING, take the papers to a lawyer or counselor to be sure you fully understand what you are signing. It is a legal document and you will be bound by the terms in the modification agreement.
This information was compiled by The University of San Francisco, School of Law.
Tags: California Foreclosure, foreclosure help, lake tahoe foreclosure, Loan Default