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Options in Response to a Foreclosure Letter?

by Rose
(Baton Rouge, LA)

Fighting Foreclosures team! Thank you for accepting and answering my question and for FREE! We have been going through it lately, just received a letter notifying us of pending foreclosure. It was not expected and we're floored to say the least. So we just got this 'big and scary' letter saying we are going to be foreclosed on. PLEASE, what are our options?!? Thank you in advance!
--Rose and Mark


Response from Stop Foreclosures Team

Hi Rose and Mark,

First allow me to belay my sorries to you both in this tough time of the economy.

Receiving a Notice of Default filing from the lender is a shock to any person or business who is attempting to keep payments current.

First off, you'll want to call the customer service number on your mortgage statement to verify the status of your loan and verify they sent the letter.

Following are some options to foreclosure:

Realize others are facing this situation never considered even five years ago: the loss of their home.

Adjustable Rate Mortgages (ARM) were all the rage during the past couple of decades, as the housing market boomed, prices escalated and nearly anyone could get a loan.

Decreased income and increased payments require a lot of effort, record keeping and loss of privacy to get help, but it might help prevent foreclosure. There is no guarantee, but there is hope.

The notice is not a personal attack on you as an individual. Lenders also got swept up in the feeling of unlimited money and now have to take action to recover the debt.

You'll definitely want to decide how committed you are to your home, if you can afford to stay there and what you are willing to do to stay there.

Loan modifications of any type will require you to talk to your lender and debt counselors, requiring information about your assets and expenditures.

Be sure to make a list based on annual income and outgo. Put a star beside reliable money such as retirement and wages.

List assets you can convert into cash, like savings bonds, and IRAs.

Will anyone loan you interest-free money from family and friends? Do you have some freelancing work that adds extra cash?

For a while, your life will be an open book and exceedingly uncomfortable, but no one is judging, just giving unbiased opinions and options. On the other side, also be sure to list your bills and expenses.

If you do not want to keep your home, see a real estate agent about a short sale or outright sale. Contact your lender to see if you can deed the house back to them and get the debt forgiven.

Do realize that whether you choose to keep or walk away from your home, your lifestyle will change. It is a difficult choice and a lot of us know what you are going through.

Respond to letters from the lender with a call. Keep notes of those you speak with, the region they work with (such as Houston, New Delhi or Singapore), their title, employee number and the date and summary of the call.

Follow it up with a letter or email to that person. Keep a copy. Find out exactly what is going on and what you can do. If you do not receive the information, let the person know immediately.

Avoid vultures that thrive on taking advantage of good people unused to being in this position. Do not give money or property to agencies that promise to handle things for you, especially those who insist on coming to your house instead of you going to their office.

Make sure also that you call your state Attorney General if something looks suspicious.

Work with a conscientious licensed real estate professional, a trustworthy attorney or the U.S. Department of Housing and Urban Development online at HUD.gov. They offer free and low-cost credit counseling in person or on the phone.


We hope this gets you started on the path you need.

Best wishes always,

Jay
Stopping Foreclosure Team

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