Foreclosure is a frightening scenario currently affecting as many as one out of every 300 homeowners. The US Department of Housing and Urban Development (HUD) offers this
advice to avoid a foreclosure (and offers it by state, too).

Talk about it now. Speak with your lender. Also, foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the government. You won’t know if you are eligible for a loan modification or refinancing to reduce your monthly payments unless you talk to someone.

Measure your risk. You might be paying your mortgage now, but signs show this will soon end if you are putting groceries on credit cards, having difficulty paying other bills on time, and owe too much debt. Few people think they could actually loose their home. Upon the first missed housing payment, your lender contacts you, and if you continue to not pay your mortgage, you’ll get letters indicating back payment is due immediately. In as little as six months, a notice is taped to your door and an attorney schedules a Sheriff or Public Trustee Sale.

Watch for refinancing scams. The FBI reports mortgage fraud is up a staggering 400% from five years ago. You become prey when mortgage lenders publish notices before foreclosing on homes, or when private firms compile and sell lists of foreclosed properties and distressed borrowers to a second party. Anyone who cannot provide credentials, asks for upfront fees, or crafts a financial scheme you’ve never heard of, is likely scamming you.

Know your alternative options. The Making Home Affordable program is a government-supported program offering refinanced or modified Fannie Mae or Freddie Mac loans. Eligibility requires paying your current mortgage on time and owing less than $800k on the mortgage, to name a few. Also, you can enter a redemption period after your home has been foreclosed where you have the option to pay outstanding mortgage balance and accrued costs.

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