Foreclosure Prevention: Be Proactive

By: Rena Somar, Homeownership Advisor, NHS of Baltimore

Why is it important for a borrower to contact a lender and a housing counselor?

Contacting your lender is a necessary component in foreclosure prevention, but it can also be very intimidating. Seeking the assistance of a housing counselor provides assurance that there is a trained professional advocating on your behalf as well as uncovering the options that are available to save your home. Typically, the borrower and the housing counselor will make a conference call to the lender. Once it is determined that there is a course of action available to prevent foreclosure, the lender will send you a modification packet in the mail. Most lenders will encourage you to contact a counseling agency to get credit counseling but beware of foreclosure scams.

There are, however, some agencies that claim that they can get you a modification, but then ask you for a fee for their services. According to U.S. Department of Housing and Urban Development (www.hud.gov), “Foreclosure prevention counseling and homeless counseling services are available free of charge through HUD’s housing counseling services. Housing Counseling agencies participating in HUD’s housing counseling program are not permitted to charge consumers for these specific housing counseling services”. To report these scams you can visit Loan Modification Scams Alert at www.LoanScamsAlert.com .

Once you’ve contacted a HUD approved counseling agency, a counselor will help you complete the modification packet that the lender sent to you. Completing the packet correctly is very important, especially the budget, because it will determine the type of modification you may receive if your packet is approved. Even though you are working with a counselor, the lender usually will contact you and not the counselor. Therefore, it is very important for you to keep in touch with the counselor and lender if there are any changes in your finances or if you receive any notices from the lender. Once a complete packet is confirmed by the lender, it is then reviewed. This process may take anywhere from 30 to 90 days before a final decision is made on the application. Always remember to call your lender every 2 weeks to get an update and always ask them if there are any documents that they need updated. Foreclosure is a difficult and unpleasant experience, but if you don’t ask for help you may lose your home in a foreclosure sale. So if your mortgage is late, don’t wait, call your lender and a housing counselor today.