US Department of Housing issues guide for homeowners battling foreclosure
Housing counseling agencies are HUD-approved and can offer free assistance and advice to consumers.
Although the national rate of seriously delinquent mortgages has fallen to its lowest level since 2008, many Americans remain victims of mortgage stress, missing crucial payments that can lead to foreclosure.
To help combat this scenario, the US Department of Housing and Urban Development (HUD) has released the Homeowners Guide to Success. This advisory provides homeowners with critical information to assist them in maintaining ownership of their property, alerting them to necessary resources and counseling agencies.
The guide was a culmination of collaboration between the HUD and the Department of Veterans Affairs, Department of Agriculture, the Treasury Department, the Consumer Financial Protection Bureau, Federal Housing Finance Agency, Mortgage Bankers Association and housing counseling agencies.
The housing counseling agencies mentioned are HUD-approved and offer free assistance to consumers.
Families affected by Hurricane’s Harvey and Irma are still recovering and are likely to be targeted by scammers, according to HUD. Independent research found borrowers who sought advice from HUD-approved housing counseling agencies were likelier to avoid foreclosure than those who neglected to seek any support at all.
The guide explains that although mortgage payments are due on the 1st of every month, borrowers have until the 15th of the month to make these payments before a late fee is charged. Late fees can be charged for each month you miss a payment. Additional fees can also be charged if you go into default (more than 30 days late).
If you miss a mortgage payment, your loan will be “past due”. If a loan is 30 days past due, it may be reported on your credit report. A single late or missed payment on your credit report can reduce your credit score.
It’s vital that once you realize you can’t make a payment, you contact your mortgage servicer or counselor.
The guide explains that you’ll need to provide formal documentation, such as paystubs, bank statements, social security payments, a hardship letter and award letters, in order to be properly evaluated for assistance.
Following a full evaluation, homeowners may be facilitated by a reinstatement, forbearance plan, repayment plan, a modification, a short sale, or a deed in lieu of foreclosure. Plans depend on individual circumstances.
Fortunately for some families, the ongoing tradition of halting foreclosure evictions over the holidays will continue again this year thanks to new eviction moratoriums by Fannie Mae and Freddie Mac, the government-backed associations that buy housing assets like mortgages from lenders across the country.