If you miss your mortgage payments, you may lose your home through foreclosure. Your lender can use foreclosure as a legal means to repossess your home. If you owe more than your property is worth, a deficiency judgment is pursued. Both foreclosures and deficiency judgments have a negative impact on your future credit. You should avoid foreclosure if at all possible.
These steps can help:
- Do not ignore the letters from your lender. If you're having problems making your payments, call or write to your lender's loss mitigation department immediately. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses, loan documents/ type of mortgage, tax returns, the amount of equity in your home. Without this information, they may not be able to help.
- Stay in your home for now. You may not qualify for assistance if you abandon your property.
- Beware of offers and sales pitches that target homeowners who are struggling to make mortgage payments.
Help is Available
For help with foreclosure or finding a housing counselor, you can:
- call your mortgage servicer directly,
- speak with a housing specialist at 1-888-995‑HOPE (4673)
- contact the Department of Housing and Urban Development at 1-800-569-4287 or online at www.HUD.gov/foreclosure
- visit MakingHomeAffordable.gov
If you need help paying your mortgage or understanding mortgage products and services, the Consumer Financial Protection Bureau has resources at ConsumerFinance.gov or 1-855-411-CFPB (2372).
Have You Lost Your Home?
If you have lost your home and are looking for housing assistance, please visit the HUD.gov. Call 1‑800‑FED‑INFO (333-4636) or visit USA.gov to find more information on jobs, health benefits, and other available public assistance.
Mortgage and Foreclosure Scams
Most mortgage professionals are trustworthy and provide a valuable service by allowing families to own a home without saving enough money to buy it outright. But dishonest or "predatory" lenders do exist and engage in lending practices that increase the chances that a borrower will lose a home to foreclosure. Some abusive practices include:
- Lease-back or rent-to-buy scams: You are asked to transfer the title to your home "temporarily" to the scam artist who promises to obtain better financing for your mortgage and allow you to stay in your home as a renter with the option to purchase the home back.
- Fake "government" modification programs: These scams claim to be affiliated with the government or require that you pay high fees in order to benefit from government modification programs.
- Refinance fraud: The scam artist offers to be an intermediary between you and your mortgage lender to negotiate a loan modification.
- "Eliminate your debt" claims: Some companies may make false legal claims that you are not required to repay your mortgage or that they know of "secret laws" that can eliminate your debt.
- Refinance scams: You are encouraged to sign "foreclosure rescue" loan documents to refinance your loan. In reality, you have surrendered ownership of your home because the loan documents are actually deed transfer documents.