This is a guest post from Becky House at American Financial Solutions.
The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are preying on the vulnerability of desperate homeowners is equally frightening. Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help you save your home. Some are brazen enough to offer a money back guarantee. Unfortunately, once most of these foreclosure fraudsters take your money, they leave you flat—without doing what they said they would do. You can save yourself money and more heartache by avoiding any business that:
- “Guarantees” to stop the foreclosure process—no matter what your circumstances
- Advises you not to contact your lender, lawyer, or credit or housing counselor
- Collects a fee before providing any services
- Accepts payment only by cashier’s check or wire transfer
- Encourages you to lease your home so you can buy it back over time
- Tells you to make your mortgage payments directly to it, rather than to your lender
- Advises you to transfer your property deed or title to it
- Offers to buy your house for cash at a price that is below market
- Offers to fill out paperwork for you
- Pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand.
(Federal Trade Commission, 2009)
Keeping Your Home
There are legitimate options a U.S. Department of Housing and Urban Development (HUD) approved housing counseling agency may review with you when it comes to working on keeping your home. We’ve listed some of those alternatives below. Please keep in mind that in order for any of them to work, you need to be able to afford making payments and the lender has to agree to the program.
- Forbearance – an agreement to suspend or reduce normal monthly payments for a fixed period of time. At the end of the forbearance period you must pay all overdue amounts through a lump sum payment or a long-term repayment plan.
- Repayment plan – a written agreement between the borrower and the loan servicer where the borrower agrees to repay overdue past due mortgage debt (including late fees, legal fees, etc.) by adding an additional amount to your monthly mortgage payment.
- Loan modification – a written agreement that permanently changes one or more of the original terms of the loan. This may include the interest rate, payment amount, length of the loan or, in some cases, the amount of the unpaid principal balance.
When You Cannot Stay
If you have experienced a drastic change in your income since purchasing your home, you may be struggling with the idea of having to move. It can be very frustrating, sad, and even feel embarrassing to be faced with the potential loss of your home. However, the stress of trying to save a home you cannot afford can be just as difficult. If you know you cannot stay in the home there are some options for moving on: