If you are having difficulty making your monthly mortgage payment or even facing foreclosure you cannot afford to wait and hope that you can resolve the issue later. If you are behind on your mortgage you can be faced with foreclosure, and sooner than you may realize. Your immediate first step should be to contact your lender to discuss your situation and see what options may be available to help you stay current on your loan and stay in your home. However if you are nervous about approaching your lender or would like additional assistance you may want to consider working with a mortgage counselor in your area. Mortgage counselors are helping thousands of homeowners nationwide determine how to pay their mortgage and stay in their home.
Mortgage counselors can help you begin working your way out of your current mortgage concerns or crisis by:
There are both nonprofit and for-profit companies that advertise and provide mortgage counseling. These organizations typically offer a wide array of services including debt consolidation, budget counseling, credit counseling and bankruptcy counseling, as well as mortgage or housing counseling help for people who are behind on their mortgage payments and/or are in danger of defaulting and going into foreclosure.
All organizations providing mortgage counseling are not alike. Because credit and mortgage counseling is not a highly-regulated industry it’s important to know what to look for before choosing an organization to work with.
Finding a Mortgage Counseling Organization
You should look for a housing counseling agency approved by the U.S. Department of Housing and Urban Development (HUD). HUD-approved housing counseling agencies have information on both federal and local services and assistance for homeowners facing financial crises, as well as support from private or community organizations. Access the list of U.S. Department of Housing and Urban Development's list of (HUD)-approved counselors. You may see several organizations in your area that are HUD-approved housing counselors. Some organizations may specialize and only provide housing-related counseling (for first-time homebuyers, homeowners facing mortgage difficulties, etc.) while others may provide an array of counseling services related to a broad spectrum of financial topics including how to manage or consolidate credit card debt, pre-bankruptcy counseling, etc.
Check to see which organizations on the HUD list of approved counseling agencies:
If you're unclear about one of those three topics call the office and ask or visit their website.
Once you have found a potential counselor, you should do two things:
How to Know if an Organization is Legitimate
Anytime you use the services of a counseling organization you should do your homework to make sure it's reputable. While all HUD approved organizations have had to meet criteria established by HUD to be approved, it's still worth asking a few questions to be sure of whom you're working with. It is especially important if you decide to talk and possibly work with an organization offering mortgage counseling that is not on HUD's approved list of housing/mortgage counselors. To make sure you are using a reputable organization ask the following questions:
Unfortunately when the economy tightens and credit becomes more difficult to access, predatory lenders and fraudulent companies take advantage of unsuspecting, and often worried, homeowners promising to resolve their problems quickly. You may notice, or may have even been contacted by, for-profit companies that promise to negotiate a loan work-out with your lender for a steep fee. Even if these are legitimate businesses they are charging a high price for information and services that a HUD-approved housing counselor will provide for free. And if a company claims that it can stop your foreclosure immediately be very wary. They often offer to “act on your behalf” if you will simply sign a document – a document which in many cases involves you (without being aware of it), signing over the title, or ownership, of your home to that company and now you become a renter in your own home. You should never sign a legal document without taking time to ensure that you understand all the details of the contract and getting advice from an experienced, trustworthy attorney and/or a HUD-approved housing counselor. If you are concerned that you may be the victim of mortgage counseling fraud contact your state attorney general’s office.
Options You May Be Offered
When working with a mortgage or housing counselor, you may be offered one or more options including:
Working with a HUD-approved, reputable housing or mortgage counseling organization can help provide you with the tools, resources and support you may need to stay in your home, get current on your mortgage and avoid foreclosure. Free phone counseling by HUD-approved counselors is available 24 hours a day, 7 days a week through the 888-995-HOPE hotline. The hotline's foreclosure counselors listen to the homeowner's situation, and then offer a customized workout plan. If more counseling or contact with the lender is needed, the counselors will link callers to their lenders, to local NeighborWorks® organizations and to other nonprofit organizations for specific help. You can also find information on U.S. Department of Justice-approved credit counselors who may be able to help you learn and consider various options to facing foreclosure or filing for bankruptcy, depending on your financial situation.