Tips for what to do if you are facing foreclosure on your home

Dennis Norman

Unfortunately a record number of homeowners continue to face the scary prospect of losing their homes as a result of the declining real estate market and economy.  I have done several prior posts about various resources available to such people however according to the Consumer Credit Counseling Service (CCCS) of Greater Atlanta, many homeowners remain confused or afraid to confront their mortgage problems and take action to help save their home.

• Fear – Homeowners are afraid to let the mortgage company know they are having a problem because they think it will speed up the foreclosure process.
  • Reality – Contacting your lender is an important first step if you want to save your home from foreclosure. It provides you with an opportunity to explain why you have fallen behind on your payments and what steps you are taking to get back on track. Lenders have a financial interest in keeping you in your home and may be willing to alter the terms of your loan or devise a repayment plan.
• Fear – Homeowners believe that if their mortgage company has already turned them down for a loan modification, there is no point in contacting a counseling agency.
  • Reality – Many homeowners are turned down for a loan modification because the information they provide to their lender indicates that their expenses exceed their income or that they have not provided accurate documentation and information about their loan. In other cases, the lender may have made a processing error or the investor who owns the loan will not modify loans in accordance with the Making Home Affordable program.    A housing counselor may be able to suggest alternatives that better suit your current financial situation or help you make adjustments that make you a better candidate for a loan modification with your lender.
• Fear - Homeowners fear being judged by others for seeking help.
  • Reality - These are challenging financial times. While it may feel like you are the only one struggling, the reality is that many of your friends and neighbors are also finding it difficult to stay afloat. By seeking help, you will not only increase your chances of avoiding foreclosure, you may also serve as an inspiration to others.
• Fear – Homeowners think it is better to use all of their financial resources before seeking help.
  • Reality – Many homeowners try to ride out the financial storm, using their savings and depleting their retirement accounts before seeking help. By the time they do seek help, they are in an even more desperate financial situation and they have spent the resources that may given them more options in dealing with their mortgage crisis.
• Fear - Homeowners facing foreclosure fear that their situation is hopeless.
  • Reality – For homeowners facing foreclosure, the feelings of hopelessness and despair can be overwhelming. While for some, seeking help may mean saving their home, it is inevitable that some homeowners will end up in foreclosure. A certified housing counselor can help homeowners work through the foreclosure and build a new path for long term financial success.
• Fear - Companies claiming they can save your home charge large, up-front fees.
  • Reality – You can receive counseling from a reputable, nonprofit housing counseling agency at no charge. While there are unscrupulous businesses looking to take advantage of homeowners, there are also many HUD-approved housing counseling agencies that offer help for struggling consumers. CCCS provides free counseling for homeowners and helps them explore alternatives to foreclosure. Counselors will review their current financial situation, explain options that may be available through their lender and, in some cases, contact the lender on behalf of the homeowner.

CCCS is not the only not-for-profit agency out there that can provide help to homeowners facing financial problems, and this is not an endorsement of them, however they are a reputable agency that serve clients in all 50 states and is accredited by the Council on Accreditation and a member of the Better Business Bureau and the National Foundation for Credit Counseling (NFCC).