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Beware Of Foreclosure Scams — Help Is FreeScam artists are stealing millions of dollars from distressed homeowners by promising immediate relief from foreclosure, or demanding cash for counseling services when HUD-approved counseling agencies provide the same services for FREE. If you receive an offer, information or advice that sounds too good to be true, it probably is. Don't let them take advantage of you, your situation, your house or your money. To determine if you are a possible victim of a scam, ask yourself these two questions: - Were you told you had to pay a fee to obtain counseling services?
- Were you guaranteed a loan modification or asked to do any of the following:
- Sign over title to your property
- Redirect mortgage payments
- Stop making loan payments
If the answer to any question is “Yes,” then report the possible scam.Call 1-888-995-HOPE (4673) or click here to report a scam online (with your permission the complaint will be shared with federal and state law enforcement). For more information, please visit: www.loanscamalert.org
www.preventloanscams.org Here are some Tips and Warning Signs:Help is free!
HUD-approved housing counseling agencies can help you negotiate with your lender or loan servicer. There is never a fee to get assistance or information from your mortgage company or a HUD-approved housing counselor. While some fee-based counselors are legitimate, be sure you know that free counseling is available and may be most suitable for you. Call 1-888-995-HOPE (4673) for free housing counseling.
Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house.
Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
Don't sign papers in exchange for a promise that someone else will pay off your mortgage.
ALWAYS be sure to read and understand all paperwork before signing to ensure that you are not unknowingly giving someone else ownership of your home.
Never submit your mortgage payments to anyone other than your mortgage company without your mortgage company's approval.
Scammers might ask you to make your payments to them; however, they pocket your payments instead of sending them to the mortgage company.
Beware of anyone who says that you don't need a real estate professional or title company when selling your home.
You should always have a real estate professional, attorney or a title company to help you with any transaction involving your home.
Know the person you do business with.
Before responding to any person or organization offering to "save" you from foreclosure, find out if the organization is HUD-approved. Find a housing counselor on the HUD.gov website. Your mortgage company or a HUD-approved housing counselor is the safest source of information and help. |
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Short Sale Option
If you are facing foreclosure and can no longer afford your home, you may qualify for a Short Sale—even if you don’t think you can (or haven’t been able to) sell your home.
What is a Short Sale?
A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. You may also be eligible for the government’s Home Affordable Foreclosure Alternatives Program (HAFA) which offers short sale and DIL options.
A short sale is an alternative to foreclosure and may be an option if:
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You are ineligible to refinance or modify your mortgage
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You are facing a long-term hardship
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You are behind on your mortgage payments
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You owe more on your home than it’s worth
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You have not been able to sell your home at a price that covers what you still owe on your mortgage
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You can no longer afford your home and are ready or need to leave
What are the benefits of a Short Sale?
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Eliminate or reduce your mortgage debt
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Avoid the negative impact of a foreclosure
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Start repairing your credit sooner than if you went through a foreclosure
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May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)
What is the process for a Short Sale?
If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:
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set the sale price (based on current market value),
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collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
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review acceptable offers,
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agree to the terms of the sale once a buyer is in place, and
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work with the buyer’s real estate agent and mortgage lender to finalize the sale.
In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.
A Short Sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage (also called a Deed-in-Lieu of Foreclosure).
Next steps
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Gather your financial information—Make sure you have your basic financial and loan information on hand when you call your mortgage company. You’ll need:
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your mortgage statements, including information on a second mortgage (if applicable)
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your other monthly debt payments (e.g., car or student loans, credit card payments), and
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your income details (paystubs and income tax returns).
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Explain your current situation—Be ready to outline your current hardship and explain why you are having trouble making your mortgage payment, the reasons why this is a long-term problem and inform your mortgage company that you want to sell your home to avoid foreclosure. Your mortgage company will need to understand the reasons why you are having difficulty in order to find the right solution for you.
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Contact your mortgage company—Tell them you are interested in a Short Sale and you want to see if you qualify.
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Contact a licensed real estate agent—Tell them you are interested in listing your home for sale (if you have not already done so).
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Information you might need
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Modification OptionMany homeowners have fallen behind on their mortgage, and could soon be on the path to foreclosure without permanent help. If this sounds like your situation, you may be eligible to modify your mortgage. You may also qualify for the government’s Home Affordable Modification Program, which was designed to help borrowers make their payments more affordable. Under this option, you reach an agreement between you and your mortgage company to change the original terms of your mortgage—such as payment amount, length of loan, interest rate, etc. In most cases, when your mortgage is modified, you can reduce your monthly payment to a more affordable amount. A modification may be an option if: - You are ineligible to refinance
- You are facing a long-term hardship
- You are several months behind on your mortgage payments or likely to fall behind soon
What are the benefits?- Resolve your delinquency status with your mortgage company immediately
- May reduce your monthly mortgage payments to a more affordable amount
- Change the original terms of your mortgage permanently, giving you a new start
- Less damaging to your credit score than a foreclosure
- Stay in your home and avoid foreclosure
How does it work?A modification involves one or more of the following: - Changing the mortgage loan type (e.g., changing an Adjustable Rate Mortgage to a Fixed-Rate Mortgage)
- Extending the term of the mortgage (e.g., from a 30-year term to a 40-year term)
- Reducing the interest rate either temporarily or permanently
- Adding any past-due amounts, such as interest and escrow, to the unpaid principal balance, which is then reamortized over the new term
Next steps
| Gather your financial information—Make sure you have your basic financial and loan information on hand when you call your mortgage company. You’ll need: - your mortgage statements, including information on a second mortgage (if applicable)
- your other monthly debt payments (e.g., car or student loans, credit card payments), and
- your income details (paystubs and income tax returns).
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| Explain your current situation—Be ready to outline your current hardship and explain why you are having trouble making your mortgage payment and if this is a short-term or long-term problem. Your mortgage company will need to understand the reasons why you are having difficulty in order to find the right solution for you. | | | | | Contact your mortgage company—Tell them you are interested in a Modification and you want to see if you qualify. |
Your mortgage company wants to help you keep your home and avoid foreclosure. Contact them quickly to see if you are eligible for a Modification. If you need further assistance (before or after contacting your mortgage company), contact a Housing Counselor.
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