Foreclosure is the process lenders utilize to repossess a property when a homeowner fails to repay the loan as agreed.
When a homebuyer applies for and receives a mortgage loan from a lender several documents are signed at closing which includes a Promissory Note. This Note establishes the terms for repayment. The homeowner’s failure to make the mortgage payment is considered a default on the loan. When a loan is in default, the lender may start foreclosure proceedings. The following situations may contribute to defaulting on a loan:
The following situations may contribute to defaulting on a loan:
1. Loss of income
2. Increase of living expenses
3. Dishonest loan
Tips to avoid foreclosure:
1- Don’t ignore the problem. The farther you are on payments, the fewer the options are available.
2- Contact your lender as soon as you realize that you have a problem. Lenders want to help borrowers keep their homes.
3- Open and respond to all mail from your lender. The first notices you receive will offer good information about foreclosure prevention options that can help you.
4- Know your mortgage rights. Find your loan documents and read them so you know what your lender may do if you can’t make your payments.
5- Understand foreclosure prevention options. Valuable information about foreclosure prevention options can be found on the internet at Federal Housing Administration.
6- Contact HUD-approved housing counselor. The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Call (800)569-4287 or click HUD Approved Housing Counseling Agencies.
7- Prioritize your spending. After healthcare, keeping you house should be your first priority.
8- Use your assets. Do you have assets-a second car, jewelry, a life insurance policy- that you can sell for cash to help reinstate your home?
9- Avoid foreclosure prevention companies. You don’t need to pay fees for foreclosure prevention help-use that money to pay your mortgage instead.
10- Don’t lose your house to foreclosure recovery scams! If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home!
For more information, you may call (786) 331-5348.
Helpful contacts:
A. HUD Homes and Communities - Guide for Avoiding Forecloure .
B. Call Home Ownership Preservation Foundation Hotline at 1-888-995 HOPE (4673) or click Home Ownership Preservation Foundation for personal consultation.
C. Don't Borrow Trouble
Mortgage Fraud Compliants
Residents who believe they have been or are the victims of mortgage fraud may access the County's Mortgage Fraud Task Force for information or call the Miami-Dade Police Department's Economic Crimes Bureau at (305) 994-1000 to speak with an officer.
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