Empower Blog

December 08, 2022

Tips to Avoiding Foreclosure

Financial Planning, Mortgage

At CommunityAmerica, we’re all about people helping people. We strive to provide our members with the expertise and guidance they deserve through all of life’s challenges. If you find yourself behind on your mortgage payments and facing foreclosure – whether that’s due to a lack of financial stability, unemployment, or other money problems – it’s important to know the options available to help you. Remember this vital information to ensure you’re on the right path to get through this difficult time without losing your home.

 

If You Are Unable to Make Your Mortgage Payment:

  • Don’t ignore the problem. We know acknowledging it isn’t the easiest thing, but remember, the further behind you get, the harder it will be to reinstate your loan.
  • Understand foreclosure prevention options. The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Call toll-free at 800.569.4287 for automated referrals to the three housing counseling agencies located nearest you. These friendly people 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. You can also contact your lender for similar assistance.
  • Contact your lender as soon as you realize that you have challenges making your payment. Most people don’t realize there are options and programs to help borrowers through difficult financial times. To make the process smooth, have the following information ready when contacting your lender:
    • Your loan account number
    • A brief explanation of your circumstances
    • Recent income documents:
      • Pay stubs
      • Benefit statements from Social Security, disability unemployment, retirement, or public assistance
      • Tax returns or a year-to-date profit and loss statement, if self-employed
      • A list of household expenses
  • Open and respond to all mail and phone calls from your lender. The first notices you receive will contain important information about foreclosure prevention options. Down the road, these notices may include details about pending legal action, and your failure to open the mail or answer a phone call will not be an acceptable excuse in foreclosure court.
  • Prioritize your spending. After healthcare, keeping your house should be your first priority. Take control of your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses such as monthly subscriptions and daily coffee runs that could be put toward your mortgage payment instead.
  • Consider your assets. Do you have assets such as a second car, jewelry, or a whole life insurance policy that you could 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 income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

The most important thing to note about foreclosures is that lenders don’t want to see you fail. As soon as you find yourself in a tight situation, give your lender a call and talk through everything. There is likely a product or service that can help get you through, and the sooner you call, the sooner help is available.

 

Remember these General Guidelines:

  • Don’t ignore the letters and/or phone calls from your lender.
  • Contact your mortgage lender as soon as you realize there’s a problem. CommunityAmerica mortgage lenders can be reached at 800.569.4287.
  • Contact a HUD-approved Housing Counseling Agency: 800.569.4287.

 

If you find yourself needing basic, judgment-free advice to get your household finances in order, consider meeting with a CommunityAmerica Well-Being Coach. From life planning and budgeting to reviewing the financial basics, our coaches are here to help you establish a plan that works best for your specific situation to get you on a path to financial peace of mind.

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About the Author
janelle holland
Janelle Holland

Financial Well-Being Coach

Janelle Holland joined CommunityAmerica in 2019 as the Assistant Branch manager of the Todd George Branch and currently serves as a Financial Well-Being Coach at the Hickman Mills Community Access Center.