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Last update: 10/21/14
FOR IMMEDIATE RELEASE
ICBA Provides Tips to Homeowners Facing Foreclosure
Calling Your Lender Is the First Step Toward Getting the Help You Need
Washington, D.C. (June 15, 2010)—June is National Homeownership Month, and the Independent Community Bankers of America (ICBA) and the nation’s nearly 8,000 community banks want to provide troubled homeowners with the information they need to help them avoid foreclosure.
“In the midst of these challenging times, many homeowners find themselves in unfamiliar territory, frightened by the possibility of foreclosure,” said Jim MacPhee, ICBA chairman and CEO of Kalamazoo County State Bank in Schoolcraft, Mich. “Homeowners should contact their lender at the first sign of trouble. This is one of the most important things they can do to help them avoid foreclosure. After all, nobody wins when a homeowner goes into foreclosure. The homeowner loses, the lender loses and the community loses.”
Community bankers have always been responsible lenders who work hard to help their customers buy homes that they can afford and afford to keep. However, many homeowners often find themselves facing foreclosure due to unforeseen life events, including loss of job, loss of a spouse and divorce. Unfortunately, these troubling economic times have only made matters worse for many hardworking Americans.
If you are having a difficult time paying your mortgage and fear foreclosure, ICBA offers the following suggestions*:
- Contact your lender immediately. Remember that your lender doesn’t want your house, and they may have options available to help you get back on track. If they don’t know there’s a problem, they can’t help you solve it.
- Contact a HUD-approved housing counselor. The U.S. Department of Housing and Urban Development (HUD) funds free or low-cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender, if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.
- Check into the Obama administration’s Making Home Affordable Program. The Home Affordable Modification Program provides eligible homeowners the opportunity to modify their mortgages to make them more affordable. Over one million homeowners have already gotten help under the program. The program is on track to help 3 to 4 million homeowners by 2012.
- Don't ignore the problem. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
- Open and respond to all mail from your lender. The first notices you receive will offer good information about foreclosure-prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
- Know your mortgage rights. Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting your state government housing office.
- Understand foreclosure-prevention options. Valuable information about foreclosure-prevention (also called loss-mitigation) options can be found online.
- 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.
- Use your assets. Do you have assets such as a second car, jewelry or 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.
- Avoid foreclosure-prevention companies. You don’t need to pay fees to prevent foreclosure. Instead, put that money toward your mortgage. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide for free if you contact them.
- 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 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.
For more information about ICBA, visit www.icba.org. To find a community bank, visit ICBA’s community bank locator by clicking here.
*Foreclosure prevention tips are provided by HUD. For more information, visit www.hud.gov.