Facing foreclosure? Here's what to do
Posted: Thursday, December 18, 2008 11:43 AM by Elizabeth Chuck
By Rich Gardella, NBC News producer
NBC's Chris Hansen will have a full report on evictions this Friday, Dec. 19, on Dateline. Tune in from 9 p.m. to 11 p.m. ET to learn about foreclosures and the officers tasked with evicting homeowners.
While the mortgage industry claims it's working to prevent foreclosures, in June of 2008, NBC's Lisa Myers reported that the numbers show that many people whose mortgage loans have entered foreclosure are not getting long-term relief to help them save their homes. NBC also had several web-only reports that offer a detailed look at mediation services, loan counseling, what Iowa learned from the farm foreclosures of the 1980s and what public servants who are working in the trenches make of the current crisis.
Are you in that situation? Are you behind on your mortgage payments, or already in foreclosure? Or have you just experienced a life change which will affect your ability to pay? Consumer advocates, loan counselors and government housing officials support these recommendations about what to do:
1) Ask for help. Don't wait.
2) Contact your loan servicer. Check the servicer's website to see what help is available for borrowers needing assistance.
3) Contact a mortgage help hotline, your state's department of housing and/or a HUD-approved mortgage loan counseling service.
4) Get a HUD-approved counseling service to take your case and work with your servicer to try and get it resolved without foreclosure.
Avoid foreclosure services that charge you a fee. HUD-approved counseling agencies are generally free of charge.
5) Ask the counselor about the possibility of getting a loan modification -- changing the terms of your existing loan to terms you can afford.
6) Attend a foreclosure prevention workshop event in your area to get additional information face-to-face.
7) Don't apply for more credit.
Mortgage Help Hotlines
There are various mortgage help hotlines borrowers can call for assistance and guidance.
HOPE NOW Alliance - Homeowner's Hope Hotline
888-995-HOPE (4673)
The HOPE NOW Alliance is a private-sector group of counselors, mortgage market participants, and mortgage servicers. At President Bush's direction, the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development established this alliance to provide voluntary assistance to borrowers.
State Mortgage Help Hotlines
Many states have set up their own mortgage help hotlines. To see if your state has one, go to p. 15 of the report at this website:
If your state has a hotline, you can find it by searching the Internet on your favorite search engine using the keywords "mortgage hotline [your state]."
You can also call your state's department of housing and ask.
For our report, we visited these mortgage help hotline administrators in Iowa and Maryland:
Iowa
877-622-4866
http://www.iowamortgagehelp.com/
http://www.iowamediationservice.com/
Maryland
877-462-7555
http://www.mdhope.org/
State-by-State List of Approved Housing Counseling Agencies
You can also contact a mortgage loan counselor in your state directly. The U.S. Department of Housing and Urban Development maintains a list of government-approved housing counseling agencies -- searchable by state on an interactive map at HUD's Web site.
Other Resources
For borrowers who are interested in digging deeper:
The Federal Housing Administration, part of the U.S. Department of Housing and Urban Development, offers educational resources for borrowers about how to avoid foreclosure.
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry.
Its website features MBA's information about the state of the industry.
It includes an online Foreclosure Prevention Resource Center with other links here:
That page includes a directory list of foreclosure prevention workshop events (on the upper right side of the webpage), listed alphabetically by city.
The State Foreclosure Working Group comprises representatives of the Attorneys General of 11 states (Arizona, California, Colorado, Iowa, Illinois, Massachusetts, Michigan, New York, North Carolina, Ohio and Texas), two state banking departments (New York and North Carolina), and the Conference of State Bank Supervisors. The Group was formed in the summer of 2007 to work with servicers of subprime mortgage loans to identify ways to work together to prevent unnecessary foreclosures.
SFWG's focus is the prevention of unnecessary foreclosures, foreclosures where the homeowner has the desire and reasonable ability to make payments on a mortgage loan and the secondary market investors that own the mortgage loan have a financial incentive to modify the loan rather than incurring the significant costs and likely greater losses from foreclosing on the loan.
SFWG has published two reports this year of its findings about what the statistics about current foreclosures and loans reveal, including lessons for borrowers.
The Iowa State Office of Attorney General prepared a background synopsis of the current foreclosures crisis last year, titled "Overview of the Subprime Foreclosure Crisis." An explanation of why the crisis occurred, written in plain English.
The Pew Center on the States, a research organization, has online research on mortgage lending and foreclosures here.
You can view its comprehensive report on what states are doing, "Defaulting on the Dream: States Respond to America’s Foreclosure Crisis (April 2008)."
The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices.
The Board of Governors of the Federal Reserve offers educational resources for borrowers about mortgage loans.
Editor's Note: Samia Badih and David Culver contributed to this report.
Click here to watch the web-only reports that offer a detailed look at mediation services, loan counseling, what Iowa learned from the farm foreclosures of the 1980s and what public servants who are working in the trenches make of the current crisis.
