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When Debt Mounts, Take Action to Prevent Foreclosure

(ARA) – If you have experienced foreclosure, you’re not alone. Within the last five years alone, more than 2.9 million households in the United States have experienced foreclosure.

Unfortunately, according to a national poll recently funded by the Homeownership Preservation Foundation, 53 percent of American homeowners would not contact their mortgage company for help if faced with delinquent payments.

Fortunately, many foreclosures could be prevented if a homeowner would call their mortgage company or the Foundation’s toll-free, confidential hotline — (888) 995-HOPE — as soon as they recognized that they may have a problem paying their mortgage. The longer a homeowner waits to call for help, the fewer options they have to save their home.

Homeowners who call (888) 995-HOPE receive free, confidential advice from HUD-certified counseling agencies. The counselors work with homeowners to develop an action plan that addresses the homeowner’s financial difficulties. In addition, the counselors attempt to connect homeowners with their mortgage company to develop a plan that prevents a home from moving into foreclosure.

According to Walt Fricke, president and executive director of the Homeownership Preservation Foundation, too many American homeowners live on the financial edge. ‘They’re just one crisis away from financial disaster,’ Fricke says, who notes that job loss, a health issue or divorce are among the most typical life events encountered by the Foundation’s counselors in working with homeowners.

If you’re a homeowner whose debt is continuing to grow and you’re finding that you’re having more and more difficulty paying your bills, the Homeownership Preservation Foundation recommends that you consider taking the following action:

  1. Take a close look at your bills — unopened envelopes or a steadily growing pile of bills from utility companies, your mortgage company, etc., are the most immediate sign you have a problem.

  2. Open letters from your mortgage company and other creditors. Don’t ignore these letters.

  3. Admit you have a problem and dedicate yourself to getting help. If you don’t get help and avoid your mortgage company and other creditors, you will damage your credit and, more importantly, you may lose your home.

  4. Don’t take it on yourself. Call for help. Call your mortgage company to understand what your options are.

  5. Make a call. If you don’t feel comfortable calling your mortgage company, call the Homeownership Preservation Foundation at (888) 995-HOPE to receive free advice from counselors who work for HUD-certified nonprofit agencies.

  6. BEWARE of phony counseling agencies (deal only with HUD-certified agencies), as well as offers in the mail or by phone that seem too good to be true.

  7. Create an action plan to first determine how to pay for essentials for you and your family (food, healthcare, clothing, essential utilities, transportation, and shelter).

  8. DO NOT sign any papers you don’t understand.

  9. Short term plan of action.Determine if you have the cash flow to continue paying a mortgage, to refinance your current mortgage, or to determine if you should sell your home and find less expensive housing.

  10. Set a long-term goal of getting and staying out of debt and ensuring steady cash flow.

    The Homeownership Preservation Foundation is a Minneapolis-based nonprofit organization dedicated to helping homeowners facing financial difficulties retain their homeownership.

    Courtesy of ARA Content