Facing Possible Foreclosure? Call for Help!
Washington, DC -– This June,NeighborWorks America urges homeowners at risk of foreclosure to take the first step to avoid losing their biggest investment: Call for help.
“During National Homeownership Month and throughout the year, we must do all we can to ensure homeownership is not built on quick sand. The earlier financially distressed homeowners reach out for assistance, the more options they have to address their mortgage issues and potentially avoid foreclosure,” said Kenneth D. Wade, NeighborWorks America CEO (shown at right).
Industry studies show the foreclosure rate on mortgage loans has increased by more than 50% since 2000.
How did this happen? While property values steadily increased and interest rates held near historic lows the past few years, buyers rushed into homeownership, and many were tempted by inappropriate loan products that appeared to be low-cost. These loans actually had short-term benefits and while they initially got many buyers into their homes, their interest rates were variable; as they climbed, tens of thousands of homeowners have been shocked by monthly payment increases they now cannot afford. In addition to rising interest rates, many families face foreclosure as a result of certain trigger events, such as loss of a job, reduction in income, or a health emergency. While there is no one reason that can explain why homeowners are facing foreclosure at an increasing rate, the surest way out is to ask for help.
According to recent industry studies, more than half of homeowners facing foreclosure do not call for help when they begin to fall behind on their payments. The early stages of delinquency are the most crucial — studies show that homeowners who are one or two payments behind are more likely to keep their homes than those who have fallen further behind on their payment schedule.
Homeowners having trouble paying their mortgage are encouraged to call 1-888-995-HOPE to receive foreclosure prevention counseling from U.S. Dept. of Housing and Urban Development (HUD)-certified counseling agencies, which include members of the national NeighborWorks network.
Many borrowers may be hesitant to call their bank because of embarrassment, fear, or lack of trust. Working with a counselor may help alleviate this anxiety because a counselor has the ability to serve as mediator between the borrower and lender.
With the help of a counselor, a homeowner can work with his or her lender to develop a reasonable action plan that will offer relief to the borrower. Lenders are often willing to work with a borrower to develop a plan of action designed to put the family back on the financial road to recovery.
Local NeighborWorks organizations that provide homeownership education and counseling can deploy a range of services to help homeowners at risk in the communities they serve, including face-to-face counseling, bridge loans to help borrowers falling behind in payments catch up, counseling on refinance options, and rehab loans for repairs and maintenance.
For more information about avoiding foreclosure, contact your local NeighborWorks organization (www.nw.org), or call 888-995-HOPE.