A practical plan of action from a HUD-certified housing counselor.
We talked to Barry Rothman, a HUD-certified housing counselor to learn exactly what steps distressed homeowners can take to identify options that could help save their homes from foreclosure.
The second step for someone with a home who’s having difficulty is to try and find a HUD-approved housing counseling agency. You’re going to speak to a counselor who’s trained in various programs and then they can walk you through some of the various options that will be out there for you.
HUD-approved housing counseling agencies, we don’t accept any money from homeowners to help them with their problem. What we do is paid for by grants and other programs, so we’re not going to ask you for money, we’re not here to make money off of you. We’re here to help the homeowner – that’s what we’re entrusted to do, that’s what we’re trained to do.
I’m with the company now six years and we’ve helped hundreds of people through various programs – helping people either to get payment assistance while they’re having a loss of income or reduction of income, helping people to have a reduction in the amount they owe through the principal reduction program, and helping people who are elderly who have reverse mortgages who have also needed help to get back on track.
Everybody’s situation is different and the options that you may need to avail yourself of are going to be different so you can’t just judge it by what a friend did or a relative, every situation is very unique and that’s what the HUD counselor is trained to do is to find out what your problem is and then try and find a solution to the problem.
Don’t be afraid of your lender
The first step Barry mentions in the video is often the one that homeowners are gun-shy about taking. When you start to fall behind or have a fear you may fall behind because you lose your job or have overtime hours cut at work, the kneejerk reaction is to avoid your lender and dodge them as much as possible. You essentially treat your lender like a debt collector because you just don’t want to talk to them and admit there may be an issue.
However, unlike the situation that you face when you have a debt in collection, your lender is really there to help and assist you in finding a solution that keeps your mortgage out of default. It’s in the lender’s best interest to help you find the means to save your home. Foreclosure is expensive for lenders and even they usually prefer to avoid it.
These are four options your lender might be able to offer if you’re having problems keeping up with your monthly mortgage payments:
- Refinancing – secure a new mortgage with better terms, which may include a lower interest rate and adjusted monthly payment schedule
- Temporary repayment plans – this is where your lender agrees to make special arrangements to accept a lower monthly payment for a period of time while you work to get back on your feet
- Forbearance – this option actually temporarily suspend your monthly mortgage payments for a period of time until your regular monthly payment amount can be reinstated once you recover
- Mortgage modification – with this option you and your lender change the terms of your mortgage, taking actions like reducing the principal if the value of your home has changed or extending the length of your loan which could lower your payments
Lenders don’t exactly advertise and promote these options for distressed homeowners because (of course) they want you to make your payments as scheduled. However, when you need help they may extend one of these options as a solution if you reach out to them as soon as you realize there is an issue.
Finding programs that fit your needs
In addition to the personalized assistance you can get from your lender, your next best resource when you want to save your home is a HUD-certified housing counselor. Housing counselors are educated and trained to understand the various programs available in their state. Counseling services are always provided at a state level, because real estate law and many of the programs available are state-run or state-funded.
So, for instance, Consolidated Credit’s housing counseling team is trained to help Florida homeowners. As such, they know about federal programs like HAMP and HARP that can help homeowners refinance or modify an existing mortgage, but they’re also versed in the Florida Hardest Hit Fund. This localized expertise can be invaluable as you explore every available option to save your home.
If you’re a distressed Florida homeowner who needs to understand options that could help you save your home from foreclosure, we’re here to help. Call Consolidated Credit today at 1-800-435-2261 to speak with a HUD-certified housing counselor free of charge.