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Consumer - Mortgage Foreclosure

To better understand the mortgage foreclosure process, here are some definitions of important terms:

The prospect of losing your home to foreclosure certainly would be a terrifying experience.  In the event you are having trouble keeping up with your mortgage payments, here are several suggestions to help avoid foreclosure. 
Communicate with your loan servicer. Be sure to speak with your servicer and let them know you are having trouble making payments. Some servicers will work with borrowers to help them avoid foreclosure by modifying loan terms to make their payments more affordable. If you ignore the problem, it almost certainly will make it worse. When discussing your loan with your servicer, be sure to do the following:

Know your mortgage. Review your loan documents to determine your rights and obligations under your mortgage. If you can’t find answers to your questions by reading your mortgage documents, contact your servicer and ask. Your loan servicer is the party responsible for collecting your mortgage payments.

Be sure to at least find the answers to these questions:

Be wary of potential scams. There always are people willing to take advantage of desperate individuals to make an easy profit. Never sign a legal document without reading it and being sure that you understand it. If you do not understand something, it is wise to seek trusted professional advice from an attorney or a HUD-approved counselor. (See “More Information” below for details on HUD)

Be cautious of claims by individuals or businesses that they can “rescue” you and help you remain current on your mortgage. If an offer to help sounds too good to be true, it probably is. The most common mortgage foreclosure scams you should watch out for include:

Consider selling your home without foreclosure. Sometimes, servicers will delay foreclosure proceedings if you have put your home on the market. If your home is less valuable than the amount of your loan, your servicer may allow you to sell your home at a loss, and forgive the rest of the loan (you could, however, owe income tax if you choose to go this route and should consult your tax advisor).
More Information