First of all, don’t wait around, ask for help as soon as you realize there’s a problem with paying your mortgage. Banks and other loan servicers are becoming more willing to help now than they have been at any point during the current mortgage crisis. Sure, some of them are still bureaucratic nightmares to deal with but others are realizing that the political backlash against them could cause them to have to deal with even more regulation. Even if you fail to make any headway in preventing foreclosure, taking action can help your self-esteem much more than waiting around for things to happen to you.

Should you ask a government agency for help with your mortgage? That’s a good question. There are HUD-approved mortgage loan counseling services available that can help, provided you can get an appointment to speak with them. Many offices are having trouble keeping pace with the demand and with governments having to cut back on programs and expenditures to get their own financial house in order this situation may not improve soon. It is, however, always worth a try since these services are free of charge and can help you avoid mortgage repayment scams.

Some government sponsored agencies have been offering foreclosure prevention workshops. These can be helpful since they can gather all the necessary people and resources in one location. Just make sure that any foreclosure prevention workshop is government sponsored and not a trick by a dishonest mortgage service company.

Should you seek help from a private foreclosure service? I generally recommend that you avoid these services due to the dishonest nature that many of them have exhibited. Also, even if you find an honest foreclosure service, you’re probably no financial condition to pay for their services or to deal with the consequences of bankruptcy, something many of them push.

Should you seek a loan modification? While it is possible to get a lender to agree to change the terms of your existing loan to terms that you can afford, this can be quite difficult to do. Many homeowners who’ve pursued this route have ended up in worse trouble since lenders tend to accelerate the foreclosure process after a failed loan modification. I’m not saying that you shouldn’t try this avenue if it’s open to you but only not to hinge your entire financial future on it being successful.

Perhaps the biggest thing you can do to get help with your mortgage and financial life in general is to not apply for any more credit and work hard at paying down your current debts. At the same time, work out a budget plan so that you know how much you’re spending and what you can realistically afford when you pay cash. Once you’ve taken this step and really know the truth of your financial situation, you can begin to formulate a plan to help yourself get out of the mortgage trouble you’re facing.

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First of all, you will want to gather up your financial documents. This should include your mortgage statements, both your primary mortgage and secondary mortgage if you have one. You will also need information that documents your income such as your current pay stubs and most recent income tax return. Additionally, you will want your recent bank statements and investment statements. Lastly, you will need to have other financial information such as amount owed on car loans, credit cards and any other consumer debt.

Now that you have all of your financial information together, go to the Making Home Affordable website and click on the “Find Out If You Are Eligible” link. Next, select the program type that best fits your situation, either loan modification or refinancing. You may want to review both your options to see which you’re most qualified for. If you don’t qualify for either program based on their web application and still feel that you need assistance with your home loan, don’t get discouraged. You may still qualify for other programs or for lender based loan modifications.

After you’ve determined your qualifications for the Making Home Affordable you will want to get in contact with a HUD-certified housing counselor. You can find one by calling the HUD information line at 1-888-995-4673 or going to the Department of Housing and Urban Development Foreclosure Avoidence Web site. You should be prepared to take notes when you speak with a housing counselor on the phone. Jot down the names of the people you talk to, the date and time as well as the basics of the conversation such as promises that were made or if your were denied. You should also receive a case number. I recommend keeping a notepad handy for this purpose because staying organized is quite important in this effort.

If your current lender gives you a hard time in your refinancing efforts, a new rule change may help you. This new rule allows homeowners who have a mortgage that is guaranteed by Freddie Mac to refinance with any Freddie Mac affiliated lender. You will also be able to roll a larger percentage of you closing costs into the refinancing as well. This additional flexibility in the program should help those who’ve had frustration in obtaining a home loan modification under the current rules from certain lenders.

It is important to remember that you must be current on your mortgage loan to qualify for a government-sponsored refinancing plan. Should you be behind on your home loan you may still qualify for a loan modification under the Making Home Affordable program.

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First of all, put your emotion aside and channel your energy into finding a solution to your problem. Dwelling on the emotion of the situation only makes it worse while taking action, even if it means finding and moving to a new location, can help you recover mentally from the blow. When you begin to think clearly and take action, you’ll feel much better. Let’s take a look at some of the basic steps you can take and who you can turn to who can assist you in this situation.

If you are having financial problems as serious as foreclosure, my first recommendation is to contact members of your extended family. Of course, this depends on how strong your family bonds are and how good your family relationships are. I understand that not everyone is blessed with a good family situation. But, if your relationship is good, don’t ignore the help you can get from them. Sometimes, they may be able to help you through a financial rough spot if they’re fully aware of the problem. But even if they can’t help financially, they can often help you deal with the problem at an emotional level. Sometimes close friends can substitute for family relationships but I always counsel caution when money is involved although emotional support is fine.

When one is dealing with foreclosure, one of the first places, outside of family and friends, to contact is with the Department of Housing and Urban Development (aka HUD). They can put you in touch with a HUD approved housing counselor. This counselor can give you some ideas you can use to avoid foreclosure. Even if your foreclosure cannot be stopped, these counselors have resources at their disposal that can help you find a new place to live.

You may also find it useful to contact an attorney who specializes in handling foreclosure cases. While bankruptcy is the most common way lawyers stop foreclosure they can have other tools at their disposal, such as determining if your lender has followed legal procedures correctly. Another thing that a good foreclosure attorney can do is provide an emotional buffer between you and the mortgage lender and their representatives. Since your lawyer doesn’t have an emotional stake in the dispute, they can shield you from the troubling emotions that can surround a foreclosure and speaking to lender on the phone or in person about it. The downside of hiring an attorney is the cost. If you’re having financial trouble, then one may not be affordable to you.

Real estate agents who specialize in pre-foreclosure sales and short sales may also be a helpful resource. Having an agent who knows the laws in your state and how to work with lenders on these sales can be a great asset. You do need to be a little wary about who you work with though. Some agents may be lazy in working with you for various reasons and others may push you toward questionable deals. I always recommend checking out the reputation of any real estate agent you work with but especially in the difficult situation.

In some cases, working with your mortgage lender themselves is an option. If your loan is through a smaller, local, bank or loan organization, this is a practical thing to do. They have an incentive to avoid foreclosing on properties in the mortgage portfolio and may be quite willing to work with you. If this is where your home loan is, by all means, contact them as soon as you can. However, if your loan is from a large national banks or if your loan has been sold on the secondary investment market it can be difficult or even impossible to contact anyone with any real decision making authority regarding your loan. At best, you’ll be put in touch with a low level cubical dweller who’s only interest is in following a pre-defined collection script and have no interest in hearing the details of your situation. Don’t put yourself through that kind of useless stress.

I hope this article has provided you with some ideas on who to consult when you’re dealing with a foreclosure.

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If you are facing foreclosure, you need to do start by taking a close look at your financial situation. How far behind are you on your mortgage? What caused you to get in this situation? What are your chances of recovering financially? If you don’t know where to begin, then you probably need some financial counseling to help you get back on track. If you do understand what got you into this situation, what can you do?

Of course, getting current with the payments on your mortgage is one of the best ways to prevent foreclosure. But that is typically not an option for most people. If you can make a partial payment, talk to your bank or mortgage lender. If you can, make an appointment to see someone in person. If this isn’t possible, try to arrange for a specific time for a phone conference with someone who can help. Your goal is to determine what they are willing to accept as a forbearance agreement and/or what, if any, alternative mortgage payment plans can be made. Often they’re willing to help you, especially if they’re a locally owned bank, but some aren’t willing to help at all.

If you can’t get help from the mortgage holder, your next step should be to contact the United States Department of Housing and Urban Development (HUD). HUD is the place to start when your looking for help with mortgage payments or to avoid foreclosure altogether. Their job is to point you in the right direction for the help you need. Every state has specially trained housing counselors that are know and understand the laws, rules, and restrictions related to foreclosure in their state. This foreclosure counseling is normally offered for a low fee or even free of charge. Because of the number of foreclosure scams, it is suggested that you only deal with a HUD approved housing counselor.

In some situations legal representation by a foreclosure attorney is recommended. If you’re keeping up your end of a forbearance agreement or loan modification but are still facing foreclosure, you need legal representation. The United States Department of Housing and Urban Development (HUD) can get you in touch with with affordable or perhaps even pro bono real estate lawyers in your area that specialize in foreclosures.

There are many places where you can find foreclosure assistance so make sure you take advantage of them if you need to do so.

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First of all, it’s important to understand that there is little a lawyer can do to help you save your home. None of the laws governing home mortgages, even the ones passed recently like the Making Home Affordable program, force lenders to offer lower interest rates or make other concessions to troubled homeowners. Not even a bankruptcy judge can modify or ‘cram down’ the interest rate on a mortgage loan without the agreement of the mortgage lender. Only a very few give their agreement though. While the laws offer incentives, fewer than expected mortgage lenders are offering modification programs or they’re making the process difficult. Plus, the current programs were designed to assist people with sub-prime mortgages. Due to high unemployment or underemployment, more and more conventional mortgages are falling into default and there are no programs for these loans and lenders are less willing to negotiate these loans.

What you will primarily want from a loan modification lawyer is their ability to negotiate and navigate the often tricky world of mortgage loans and real estate law. Often the troubled homeowner is overwhelmed by the amount of paperwork involved as well as the emotionally draining threat of losing their home. A good attorney can assist the homeowner in the process. This will be based on the particular situation of the homeowner. In some cases, bankruptcy, either Chapter 7 or Chapter 13, will be the best option. Others may require some negotiation and speaking with the right people. Often an attorney calling can get more attention than the homeowner calling.

But, how do you find a good and reliable loan modification attorney that can really assist you and not rip you off?

Unfortunately, the current economic situation has created a number of fraudsters billing themselves as “foreclosure rescue specialists.” These organizations, which may or may not be tied to a law firm, seek out desperate homeowners. They will often tell the homeowner that they can save their home but they want a large upfront fee to do so. Others use other legal trickery to scam troubled homeowners. You need to be very wary of any loan modification attorney or foreclosure rescue organization that makes vague promises of saving your home while demanding a substantial upfront fee.

However, there are a few good loan modification lawyers that have been successful in challenging foreclosures based on the lack of a good paper trail due to the way mortgages were repackaged as financial instruments. Others have challenged the mortgage based on evidence of predatory lending. These legal maneuvers don’t work in every case and take specialized legal skill so it is important to find a lawyer who is well acquainted with these methods.

In order to locate a good attorney you will need to find one that specializes in bad mortgages and consumer law. One of the best ways to find such an attorney is to consult your local HUD-approved housing counseling agency. They can give you a referral. Always ask for multiple references. Check out the references and make an appointment to discuss your case. This meeting should be free of charge and should clearly describe the legal process they will use and what the fees for their services will be. If they ask for a big upfront fee, be prepared to walk away. Also be wary of high pressure sales tactics as well.

Sadly, there are many more troubled mortgage loan cases than the number of available loan modification attorneys can handle. Plus, most families that are having trouble paying their mortgage are very short on money and will find it difficult to pay for a lawyer. Sometimes though, local legal aid organizations can help put troubled homeowners in touch with an attorney that will take their case for low or no cost.

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Foreclosure rescue firms have many different ways to find potential clients. Some of them simply check local foreclosure listings in local legal announcement newspapers or directly access public records at local government offices. These rescue firms will often send very well crafted personal looking letters to desperate homeowners. Other foreclosure firms cast a wide net and use Internet advertising, TV spots, newspaper ads and even fliers. No matter the method used the advertising typically features a simple message like “Stop Foreclosure” or “Save Your Home” and will be rather spotty on the details. Legitimate financial counselors don’t advertise this way in most cases.

Some will tell you that they can guarantee you that they can stop your foreclosure. Well, they can’t. This is entirely up to the lender, especially once the foreclosure legal procedure has begun. No legit housing counselor will make such a guarantee to you. Some of these foreclosure rescue firms tout that they have special business relationships with banks and mortgage lenders that will allow them to ‘fast track’ mortgage loan modification. Often, this isn’t true and, anyway, lenders will refuse to negotiate with third parties unless they’re a practicing attorney or a HUD certified housing counselor. Remember negotiating a loan modification or a short sale is a long and complex process and anyone who’s promising quick results isn’t being truthful with you.

One thing that these foreclosure rescue scammers will tell you to do is to not contact your lawyer and not to speak with the lender. This is a classic con job tactic that’s meant to keep you from communicating with people who might expose the scam to you. You should be suspicious of firms who request a fee before providing you with services. Even worse are those who ask for wire transfer payments or tell you to send your house payments to them rather than to the lender. Those who operate in person will try to pressure you into signing paperwork without explaining it. As we’ll see in a moment, this is particularly dangerous.

Perhaps the most common con is that of a fake housing counselor. These tricksters will tell you that they can save your house from foreclosure if you’ll only pay them an upfront fee roughly the same as your mortgage payment. They’ll pass themselves off as having great negotiation skills and special connections with your lender. They’ll also tell you not to contact anyone else about this special deal in order to keep it secret. As you can guess, the conman runs off with your money.

Another foreclosure rescue con that they’ll pull is to offer to get you into a new home loan that will pay off your existing mortgage loan or simply bring it current. In this case, the unwitting homeowner signs a document that turns over the house title to the scammer. They do this by pressuring you into signing quickly or by presenting you with overwhelming paperwork. The really sad part is that many victims don’t realize they’ve been conned until the sheriff shows up with an eviction notice.

Another trick that foreclosure rescue scammers pull that’s more legal but still very sneaky is a rental scheme. In this scamming technique they offer to buy your home and then allow you to stay in it as a renter and buy it back over time. They’ll say that once you’re released from the burden of the original mortgage it will be easy for you to get a new loan to repurchase the home. Unfortunately, it doesn’t work this way. Sometimes the conman just cashes out the equity and defaults on the loan, resulting in the mortgage company evicting the renter, the previous homeowner. Another way this works is for the scammer to keep raising the rent until the original homeowner can’t pay and is evicted. Sadly, this process, although highly unethical, is legal in most states.

A similar ‘sign over the deed’ trick is a buy out-move out con. In this scam the homeowner is told that a ‘white knight’ financier will buy the house from them and hold it until it sells for a profit. They’ll tell the owner to transfer the title to the house and that they will need to move out so that they can ‘flip’ the house easier. When the house sells at a profit, they promise to share the profits with the original homeowner. But, what usually happens is that the scammer simply rents out the home and pockets the money, letting the house fall into to foreclosure under the owner’s name. This creates an ugly surprise for the homeowner, because they’re still responsible for the mortgage, and for the unsuspecting renter as well.

The last foreclosure rescue scam we’ll look at is the unauthorized bankruptcy. In this paperwork shuffle con, the homeowner signs a document allowing the scammer to file bankruptcy on them. This is usually done in the guise of an offer to renegotiate the home loan with the lender or to get refinancing. This is always accompanied by an upfront fee. While bankruptcy will stop the foreclosure, at least temporarily, it does have considerable legal and financial repercussions that can be quite difficult to deal with.

Be wary of these foreclosure rescue scams and protect your financial future.

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Perhaps the most important thing you can do when you’re facing a pre-foreclosure is to contact your lender. This can be difficult for people to do because of the shame and stress associated with a difficult financial situation. When you contact your lender about your financial situation you will probably start with the customer service number on your mortgage statement. However, this may just be a service company who’s acting on the behalf of the actual lender. Make sure that you ask them if they’re the actual company who holds the loan or if they’re simply servicing the loan. If they’re a service company, try to get a number for the loss prevention department at the actual mortgage holder and contact them. Sometimes you may need to speak with a supervisor to obtain this information. If it’s the loan holder that you’re speaking with, start with customer service although you may need to move up the corporate ‘food chain’ as your case progresses.

If you’ve received a default or intent to foreclose notice it is quite important that you deal with it as soon as possible. Contact the number on the notice after you gather all the information you need. You don’t want to be on the phone with them unprepared or stressed out. Get organized and put yourself in a calm frame of mind. When speaking with them, keep your voice low and calm as best you can. This will help you stay calm even though you’re sure to be stressed and will make them less likely to try collection intimidation tactics on you.

Before calling make sure that you have a game plan in place to explain how you will deal with the pre-foreclosure situation that you find yourself in. You should have complete knowledge of your current income and expenses. You’ll need to know how much equity, if any, you have in the home. Be prepared to explain to the lender why you missed your house payments. If you’ve had a temporary setback, like a health problem or job loss, explain this to them and let them know what steps you’re taking to get back on your feet financially.

Also, try to come up with a reasonable plan to present to the lender prior to your call. If you can afford to pay for your home, make a reasonable payment proposal that’s feasible for both you and the lender. If you feel that you can’t afford to pay the mortgage as it is, let them know this as well. Then you can work through the alternatives to foreclosure that might be available to you. For example, the “Making Home Affordable” government program, that went into effect on March 4, 2009, provided $75 billion in incentives for lenders to assist in refinancing loans for troubled borrowers. Mortgage lenders may have other options too and are more willing to work with borrowers in today’s economy. Even though you may still lose your home the financial and credit repercussions will be less.

You will want to keep a record of all contacts you have with your lender. You should note the date and time of the call as well as the name of the person you spoke to and their title and department. Having good documentation of your communication is essential to getting a good outcome in a pre-foreclosure situation.

If you feel that you can’t handle this situation well yourself, then you should enlist the aid of a legitimate housing credit counselor. These counselors are trained to assist borrowers who’re facing foreclosure with sound financial advice and are certified by the Department of Housing and Urban Development. You can find a list of certified counselors at the HUD web site. Other national groups that can assist borrowers with credit problems include the National Foundation for Credit Counseling, Neighborworks America and Hope Now. Make sure that you deal with a certified, non-profit, housing credit counselor and be careful about scammers posing as such.

I hope that this article will help you if you’re facing a pre-foreclosure.

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By using information found on the Internet you can find advice about foreclosure laws in your state. You can also find out what your homeowner rights are. Most states in the US have an official website that will provide you with much of this information. I suggest that you start by performing  search on that site for information on foreclosures as they relate to your particular situation.  There you should find information on foreclosure laws in your state of residence along with detailed information on the legal process works in this case.  This information may also be available from other sources online. However, you know the information is accurate and up-to-date when you get it directly from the original source.

Another online resource that you may want to investigate is that of foreclosure attorneys or of lawyers who specialize in real estate law.  Many lawyers will provide important and timely foreclosure information on their websites. Most of them make this information available to you for free.  For example, a current search of foreclosure attorneys will tell you that in some states foreclosure can be stopped right in its tracks when bankruptcy is declared.  Although not all attorneys are willing to divulge all of their secrets, you may be surprised how much information you can find online from websites that belong to lawyers.

The Internet can also be used to help you find the right foreclosure attorney to hire in your case.  As I mentioned earlier, people who are facing foreclosure probably have limited financial resources and may find it cost prohibitive to hire a lawyer.  Fortunately, there are ways around this lack of money.  Some lawyers will accept cases pro bono, meaning for free, while others will work out a payment agreement for legal services with you.  You should hire an attorney if you should do so if you fall victim to a foreclosure scam or if you believe that your lender is treating you unfairly and illegally.  You should make sure that any lawyer you hire specializes in real estate and foreclosures.

Credit counseling websites are another online resource that’s available to you.  This can be a controversial approach, and there may be some risk involved, but help may be available to you.  Some credit counseling companies may try to work with your mortgage lender. In the best case scenario, this may result in you getting more affordable monthly mortgage payments.  With that in mind, there are many scams out there that surround these companies. That includes those that even claim to be non-profit organizations.  For that reason, do some research online first, including checking with the Better Business Bureau.

The website for the United States Department of Housing and Urban Development (HUD) should be visited as well.  This website can be found at HUD.gov. On that site you will see a lot of information that is from an accurate and reliable source. You can use their information to find out your options before, during, and after foreclosure. You can discover if your particular mortgage is covered by a government sponsored mortgage modification plan. You can also find out how to get in touch with a HUD approved housing counselor.

Another online resource are websites that are operated by individuals, such as myself, who’ve had personal experience in dealing with foreclosures during economic hard times.  These websites can be provide you with valuable resources as well as support for your situation.

I hope that you have found this basic advice about home loan foreclosure helpful to you.

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Current economic conditions have many people finding it difficult to hang on to their home since both their household income and home value have declined. Others, who bought at the peak of the real estate boom, have ended up owing a lot more than their houses is actually worth. Therefore, it’s no surprise that people just want out of bad circumstances. But, just walking away is a terrible choice and one that could cause regret and stress for many years to come. Let’s look into why this is the case.

You may assume that if you just walk away from your home and let foreclosure happen that you will be free and clear. Unfortunately, this isn’t the case.

In most states, the bank can sue you and get a deficiency judgment. This is the difference between what you owed on the house and what the mortgage lender made from the house when they sold it. Naturally, it is quite rare for a foreclosure sale to pay off the total amount owed on a mortgage loan. This may leave a former homeowner with a deficiency of $10,000 or more. In areas where home prices were very inflated it’s not unusual to see deficiencies of more than $100,000. Some states also allow for punitive damages as well under some circumstances.

Once a deficiency judgment is entered the lender can seek to garnish wages and seize or place liens on personal property and bank accounts. Some states, such as Florida, give lenders a lot of power. Others, such as California, are nonrecourse states where laws restrict the ability of mortgage lenders to obtain judgments against borrowers. Exactly what they can do will vary from state to state and from mortgage loan contract to contract so it’s best to consult an attorney if you need to know the exact implications in your case.

Also, foreclosure will destroy your credit score for up to 10 years. Typically a foreclosure being filed will drop a borrower’s credit score by 100 points and it will drop another 100 points when the foreclosure sale takes place. This can make it difficult for you to get credit for important things such as renting a place to stay or purchasing a car. It can even affect your ability to get a job.

If you’re in a position where you know you cannot afford to stay in your current home you need to be proactive. Many banks are willing to work with a cooperative borrower when it is clear that there’s no hope of them continuing to pay the mortgage. Just bear in mind that lenders will have to be convinced that you’ve tried every reasonable possibility to keep your home first. There are also government programs and HUD approved housing counselors that can help you seek foreclosure alternatives such as a short sale or deed in lieu of foreclosure. While these alternatives will cause a drop in your credit score they’re no where near as devastating as a foreclosure. Plus, most lenders will choose to not pursue a deficiency judgment if an agreement is worked out beforehand.

If saving your home is proving impossible, get expert mortgage loan and foreclosure alternative advice from a local attorney, credit counselor or HUD approved housing counselor. They can help you navigate the laws that apply to your loan and help you discover the best foreclosure alternative for your particular situation.

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