• NeighborWorks® organizations work with the Homeownership Preservation Foundation to support a nationwide assistance number—888-995-HOPE. You can speak with a counselor, day or night, to help you get back on track financially. (English and Spanish)

• Reputable counseling agencies, such as NeighborWorks® organizations, can help you avoid foreclosure. Look up your nearest NeighborWorks® organization at www.nw.org.

• The U.S. Department of Housing and Urban Development (HUD) website has a list of HUD-approved counseling organizations, by state (www.hud.gov/counseling). We recommend that the list be used as a starting point to find good counselors. You also can call 800-569-4287 or TDD 800-877-8339.

• Watch out for questionable counseling companies who advertise that, for a minimal fee, they will assist homeowners by hiring a lawyer to defend the foreclosure in court or negotiate lender assistance on the borrowers’ behalf. You should call a HUD-approved counseling organization, a local NeighborWorks® organization, or 888-995-HOPE before you pay or sign anything.

• 2/28 and 3/27 Mortgages. A 2/28 or 3/27 adjustable rate mortgage gives the borrower a fixed payment for the initial two- or three-year period before adjusting the mortgage up as often as every six months. After the initial "teaser rate" period, your mortgage payments typically adjust up every six months.

• Interest-Only Mortgages. An interest-only mortgage lets you pay only the interest on the loan for the first 5 or 10 years and nothing to pay off the loan amount (principal). After the interest-only period, the mortgage requires much higher payments covering both interest and principal that must be repaid over the remaining years of the loan.

• Payment Option Adjustable Rate Mortgages. Payment option mortgages let the borrower decide how much to pay each month. You can even pay less than the interest, and add the unpaid interest to the total amount of principal you owe. Or you can pay just the interest or an amount sufficient to pay off the loan in 15 or 30 years. These mortgages can have an especially big payment shock.

• A "teaser rate" or "no interest" period that expires and leads to a big jump in your monthly payment.

• An option to pay less than the full interest due in any given month. Taking that option makes the amount you owe go up instead of down, since the interest you don’t pay is added to your loan balance.

• An adjustable interest rate with very high or no limits on the amount your payment can go up.

• A payment that doesn’t include an amount for paying property taxes and homeowners insurance. This means you may be hit with big bills you didn’t expect.

• The best and least expensive option will often be working with the current lender (or the "loan servicer" hired by the lender to oversee your loan). Read more about your options on the next page.

• If your current lender isn’t willing or able to help, you may be able to refinance your current mortgage with another lender. REALTORS® can help you find responsible lenders that make fair and affordable loans.

• To address the growing foreclosure problem, especially with subprime loans, some state and local governments and nonprofit organizations are offering financial assistance. Ask your REALTOR® or counselor about who to call.

• Counseling agencies are in the business of helping borrowers like you. Check out Counseling Resources for some ideas.

• Remember, you should shop just as carefully for a mortgage as you do for a car or anything else you buy. Getting the lowest possible rate and fees can save you many thousands of dollars over the life of the loan.

• Sometimes the only option is selling the home. Of course, no one is better at helping a seller than a REALTOR®. It is better to sell than go through foreclosure because it will be easier to qualify for credit in the future and buy another home.

• Be wary of advertisements like "Cash for Houses/Any Situation" or "We Buy Houses for Cash." Consumer groups have learned that many of these are scams that bait homeowners with the promise of rescuing them from imminent foreclosure. Unfortunately, the "rescue" often involves the borrower signing over the house and the family being evicted from their home.

• Forbearance. Lenders may let you make a partial payment, or skip payments, if you have a reasonable plan to catch up. Tell your lender if you expect a tax refund, a bonus, or a new job.

• Reinstatement. Reinstatement refers to making a payment that covers all your late payments, usually at the end of a forbearance period.

• Repayment Plan. If you can’t afford reinstatement, but can start making payments to catch up, the lender may let you pay an additional amount each month until you are caught up.

• Loan Modification. Your lender may agree to amend your mortgage to help you avoid foreclosure. The options include:

• Sign Over the Property to the Lender in Exchange for Debt Forgiveness. This can hurt your credit, but is better than having a foreclosure in your credit history.

• Unfortunately, the amount of debt the lender cancels is treated as income when you file your tax return.

• REALTORS® and the Center for Responsible Lending are working for enactment of pending legislation so homeowners aren’t stuck with a tax bill they can’t afford to pay.

• Some lenders may require you to sign a promissory note for the difference between the value of the home and the amount owed. Before you sign any documents, please seek the advice of a housing counselor or lawyer.

• How to Avoid Predatory Lending

• Specialty (Nontraditional) Mortgages: What Are the Risks and Advantages?

• Traditional Mortgages: Understanding Your Options

• FHA Improvements Benefit You

• Sounds too easy. "Guaranteed approval" or "no income verification" regardless of borrower’s current employment, credit history, and assets. These claims indicate the lender doesn’t care about whether you can afford to make the payments over the long haul.

• Excessive fees. Higher lender and/or mortgage broker fees than are typical in your market. Because these costs can be financed as part of the loan, they are easy to disguise or downplay. On competitive loans, fees may be negotiable. It is common for home buyers to pay only 1 percent of the loan amount for prime loans. By contrast, a typical predatory loan may cost 5 percent or more.

• Large future costs. High-risk adjustable rate mortgages where the payment rises a lot after the "teaser rate" period are seldom appropriate for families who already have had problems repaying other loans. Home buyers should avoid large single "balloon" payments (a lump sum due at the end of the loan’s term).

• Closing delays. The lender delays closing, so your commitment on a reasonably priced loan expires.

• Over-valued property. Inflated appraisals that allow excessive fees to be included in the loan and result in the borrower owing more to the bank than the home is worth.

• Barriers to refinancing. Prepayment penalties that make it hard for a borrower to refinance in order to pay off a high-cost loan by taking advantage of a low-cost loan.

• No down payment loans. These loans may be split into two mortgages, with one having a much higher cost. Home buyers should be sure they can afford the payments.

• Unethical document management. Ethical lenders and brokers always require you to sign key loan papers, and never ask you to sign a blank document or a document dated before the date you sign.

• For a list of HUD-approved counseling agencies, by state, go to www.hud.gov/counseling.

• HUD’s Internet page—"How to Avoid Foreclosure"–is aimed at borrowers with FHA-insured mortgages, but can help other borrowers as well. Go to www.hud.gov/foreclosure.