Are You Facing Foreclosure?
Most people do not purchase a home with the intention of losing it. Most people I know worked very hard to save the down payment, and then worked even harder to pay the mortgage on time, maintain the property and pay all the bills associated with homeownership. All the while, having to sustain themselves with essential needs, like food and clothing.
But life just has a way of springing the unexpected on us at the most inconvenient time. I believe we call it “Murphy’s Law”.
For those of us who work hard every day just to maintain, there is never a good time to suffer a loss of income. A lot of folks were already living from paycheck to paycheck before this economic depression hit us in the gut. Now comes the layoff, like the final nail that seals the proverbial coffin. If you own a home, whether it’s a single family or a multiple family, the effects of a ‘layoff’ in this economy can be devastating. If you own a multiple family with tenants, and your tenant gets laid off and can’t pay the rent, even if you still have your job, you may not be in a position to make up the difference on the mortgage payments.
Although unexpected unemployment is what we hear about the most, it is not the only reason that causes mortgage default that leads to foreclosure. Medical emergencies, Divorce, death in the family, reduction of income, major home maintenance problems, and excessive debt all play a role in leading us down that road to inability to pay.
If foreclosure is knocking at your door, the first thing you need to understand is that you must take action. Understand that and do it! Call your lender as soon as you realize that you are unable to make your mortgage payment. Don’t let pride stand in your way. Lenders are required by HUD, FHA, private mortgage insurance companies and investors like Freddie Mac and Fannie Mae to work aggressively with borrowers who are facing money problems. If you communicate with your lender, options will be proposed to you and an agreement will most likely be made that will forego the filing of a Notice of Default. They can offer ‘workout options’ to help you keep your home. But these options work best when your loan is only one or two payments behind. The farther behind you are in payments, the fewer options you have available to you. Foreclosure is expensive for lenders, mortgage insurers and investors so most lenders do not want to foreclose.
Once your lender presents options to you, you may just feel a lot of stress draining out of your head. You will never know about the available options until you talk to someone about your situation. Some of the options that may be proposed to you are: time to make up your payments via a repayment plan, a loan modification, and refinancing.
However, if you have passed that step and you are getting mail and/or phone calls from your lender, it is important that you start responding. Your lender will not disappear just because you don’t answer the phone calls or letters-quite the opposite happens. If they do not hear from you, they will be required to start legal action leading to foreclosure. This will substantially increase the cost of bringing your loan current.
Once a Notice of Default is filed, your options become very limited. That’s why it’s better for you to call your lender before falling behind on your payments, because lenders are often reluctant to work out repayment schedules after foreclosure proceedings have been started.
In order to ‘reinstate your loan’ you will have to bring your payments current within a certain period of time, pay the costs of filing the foreclosure and stop the foreclosure. If you cannot make up the missed payments and the lender will not work with you, you will only have 3 options: sell your house, sell your house with a short sale, or sign a deed in lieu of foreclosure. Selling your house and coming out with enough money to pay off your loan can be very challenging nowadays in light of the decline in market values. So, the reality is that you will probably only have the latter two choices.
To recoup: the purpose of this article is to stress the importance of taking action early in the game. Your lender does not have a crystal ball that reveals your financial hardship to them. It will be a lot more beneficial to you if you act proactively and contact your lender to work on options.
Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies, working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.
For those readers who reside in Westchester County, NY where this Landlord Association is based, I have extracted the agency information for you. It is listed below. For all other readers, if you need foreclosure prevention counseling services go to: www.hud.gov and click on Avoiding Foreclosures and then go to Resources in your State.
Westchester and Putnam Agencies:
PUTNAM COUNTY HOUSING CORPORATION:
P: 845-225-8493-212
F: 845-225-8532
E: puthousing@aol.com
W: www.Putnamhousing.com 11 Seminary Hill Road
Carmel, New York 10512
– English
– Spanish
HUMAN DEVELOPMENT SERVICES OF WESTCHESTER, INC.
P: 914-939-2005
F: 914-939-3531
E: hdswhousinghelp@aol.com
W: www.HDSW.org
930 Mamaroneck Avenue, Mamaroneck, New York 10543
– English
– Spanish
WESTCHESTER RESIDENTIAL OPPORTUNITIES, INCORPORATED
P: 914-668-4424
F: 914-668-9515
E: vacquah@wroinc.org
W: www.wroinc.org
144 North 5th Avenue, Mt. Vernon, New York 10550
– Creole
– English
– Spanish
HUMAN DEVELOPMENT SERVICES OF WESTCHESTER, INC.
P: 914-939-2005-1103
F: 914-939-3531
E: hdswhousinghelp@aol.com
W: www.HDSW.org
28 Adee Street, P.O. Box 110,Port Chester, New York 10573
– English
– Spanish
COMMUNITY HOUSING INNOVATIONS, INC
P: 914-683-1010
F: 914-683-6158
E: dpost@communityhousing.org
W: www.chigrants.org
190 East Post Road, Suite 401, White Plains, New York 10601
– Creole
– English
– French
– Russian
– Spanish
WESTCHESTER RESIDENTIAL OPPORTUNITIES, INCORPORATED
P: 914-428-4507
T: 877-976-4968
F: 914-428-9455
E: housinghelp@wroinc.org
W: www.wroinc.org
470 Mamaroneck Ave, Suite 410, White Plains, New York 10605-1830
– Creole
– English
– Spanish
WESTCHESTER RESIDENTIAL OPPORTUNITIES INCORPORATED P: 914-207-1753-1754
T: 877-976-4968
F: 914-207-1755
E: housinghelp@wroinc.org
W: www.wroinc.org
164 Ashburton Avenue -3rd Floor,Yonkers, New York 10701
– English
– Spanish