Ways to avoid Foreclosure
If you happen to be a homeowner vulnerable to foreclosure you need to know you can utilize programs and services that may help. It’s important to move quickly and prior to being 90 days delinquent on your house payment.
Foreclosures in Illinois are a nine-month judicial process but after 90 days the lender will turn the delinquent loan over to foreclosure attorneys and then the fees really start to increase. The bottom line is to not ignore letters from the lender. There are ways to work through a bad situation if you act quickly. An approved foreclosure intervention counselor can also negotiate with a lender, servicer or private mortgage insurance provider to restructure the mortgage if it can be established the homeowner has the financial ability to keep the home going forward.
Other options for individuals facing real estate foreclosure include:
- “Forbearance” whereby a lender lets a borrower pay a lesser amount than the full amount of the mortgage or skip a small number of payments if there is a reasonable plan to become current on the loan.
- “Reinstatement” is another option if the homeowner is able to make a payment that covers all of the previous late payments.
- A “repayment plan” from a lender will allow a borrower who has fallen behind to make additional payments each month till the amount past due is paid.
At-risk homeowners are encouraged to ask a local REALTOR® or a HUD-certified financial counselor to find out where to go for help. Other resources include:
- The Illinois Foreclosure Prevention Network connects families facing foreclosure with resources to help keep their homes. http://keepyourhomeillinois.org/
- S. Housing and Urban Development homeowner counseling, 1-800-569-4287, www.hud.gov
- Neighborhood Works America Center for Foreclosure Solutions, nw.org
- This Web-site provides details on federal mortgage modification and refinancing programs: MakingHomeAffordable.gov
- HopeNow, 1-888-995-HOPE (4673), hopenow.com
- Illinois Legal Aid, www.illinoislegalaid.org
Things to keep in mind for Illinois foreclosures:
- Don’t ignore letters from the lender. Some of the information will include foreclosure prevention options.
- Address the problem immediately and BEFORE YOU ARE 12 Weeks DELINQUENT on your house payment when the loan is given over to foreclosure attorneys expenses build up.
- Find your mortgage paperwork and read it to understand the terms.
- Contact a HUD-certified counselor who is qualified to help and provide information on foreclosure prevention options, 1-888-569-4287 or the Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673).
- Learn more from Illinois Legal Aid, illinoislegalaid.org
- Know that you might be eligible for options such as working with the bank to restructure the loan or a repayment plan.
- Find a professional Illinois REALTOR® to assist you negotiate with the lender to place the home on the market if selling your home is the option you choose.
- Avoid foreclosure scams. Make certain you protect yourself by working along with a HUD-approved counselor, professional REALTOR® and/or an attorney.
- Learn more: www.hud.gov, www.nw.org, www.fha.gov, makinghomeaffordable.gov.
- Foreclosure should be your action of final measure since it will stay on your credit report for seven years and greatly affect your ability to obtain a home loan in the future.