[Back]

You may be able to cure your delinquency through improved budgeting or by contacting your mortgage servicers loss mitigation department. Bankruptcy may be an option, however, it can be a costly alternative to working out an arrangement with the loss mitigation department. An ACORN Housing counselor can assist you through this process and explain your options.

Whether or not you are able to get a workout to resolve the delinquency on your loan will depend on several factors (including your current finances and other debts, the type of mortgage that you have and the investors guidelines). If you are unable to obtain a workout arrangement on your loan, you may have to consider selling the property.

Loss Mitigation Options:

• Forbearance Agreement/Repayment Plan: allows additional time to repay the past due payments.
• Partial Claim (FHA only): loan must be at least four months but no more than 12 months past due. Loan cannot be in foreclosure.
• Loan Modification: may extend the term of your loan or lower your interest rate.

Reverse Mortgage (must be 62 years of age or older):

• A loan against your home that you do not have to pay back for as long as you are living in the property.
• You can get cash from a reverse mortgage to pay off your current mortgage loan or other debts, to pay your taxes or insurance, or to supplement your income.
• You must meet certain eligibility requirements.Please consult your local ACORN Housing to find out if you are eligible.

Bankruptcy:

• Allows you to repay past due payments through a 3 to 5 year plan. You must resume making your regular mortgage payments AND make a monthly payment to the trustee. There is a filing fee and a trustees fee.

Consider Selling Your Home:

• If you have equity in your property, selling your home prevents sheriff sale and preserves your equity.
• Specific tools may be utilized for FHA loans.

Beware of Foreclosure Scams!!!

• Once your lender initiates foreclosure proceedings, a notice of default may be recorded with the county.This information can easily become available to people who want to take your money!
• They will send letters, call and even stop by your house, and will insist that they can rescue you from foreclosure.
• Do not sign anything that you do not fully understand.Consult a housing counseling agency immediately!

Timeline (this may vary by state and lender):

Once you are behind
30 DAYS: You will begin to receive notices of default and/or collection calls once you become 30 days behind on your payments, which can continue for a month or several months

60-90 DAYS: Generally, your mortgage lender will stop accepting your monthly payments once you become 90 days behind.Now you will need to come up with everything you owe, including late charges!

FORECLOSURE: At this point (90 days delinquent), your lender can refer your account to their foreclosure department and, subsequently, initiate foreclosure proceedings against you. Foreclosure proceedings usually take a few months (varies based on your state), so you still have time!

Bottom line: THE EARLIER YOU ATTEMPT TO CURE YOUR DEFAULT, THE BETTER THE OUTCOME WILL BE.

CONTACT YOUR LENDER!
Keep your lender aware of your situation. Do not avoid calls or communications with your lender.

CONTACT ACORN HOUSING!
You may have recently experienced a hardship that has caused you to fall behind in your payments. Your local ACORN Housing may be able to assist you by explaining your options, contacting your lender on your behalf, requesting a workout arrangement to bring your account current, and advocating for you.

Print out the intake form and the list of documents: complete the intake form, gather the documents and call ACORN Housing to schedule an appointment today.

REVIEW YOUR BUDGET
Create a budget (attach budget sheet) find out what you are actually spending by writing it down.

Eliminate anything in your budget that is not absolutely necessary (for example you might consider turning your cable off, reducing your religious donations, or taking your lunch to work instead of eating out).

If your lender is refusing your payments, make sure that you are saving your monthly payments.

Save anything else you can- once your loan goes into foreclosure you will incur additional foreclosure and attorney fees.

GENERATE MORE INCOME
You may have suffered a hardship that resulted in a permanent reduction in your income. Your lender will only be willing to work out a resolution to cure the default if you can demonstrate that you have a long-term ability to afford the mortgage payments.

You may want to explore ways that you can generate more income (for example, you may be able to rent out a room in your house, take on a part time job or apply for public benefits or programs).

---

- HELP