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The loss of a home is a terrible burden on a family.  Georgians know all too well that foreclosures have been at record levels.  Over the last two years, Congressman Scott's office has fielded thousands of calls from constituents facing foreclosure problems.  Each case is unique and none are easy.  It may be useful to consider some tips that the staff has compiled based on their experiences with helping constituents with their mortgage cases.

Do:

Pay your mortgage, even if the bank tells you not to.
Work with a HUD-approved counselor.
Maintain a correspondence record in writing.
Communicate with the lender.
Get the ID number and full name of the representative with whom you speak.
Know your mortgage contract parameters and rights.

Don’t:

Stop paying your mortgage.
Have unrealistic expectations if your financial situation is suffering.
Stop sending requested documentation to lender.
File bankruptcy without being fully aware of the effects and implications.
Wait to seek mortgage assistance or housing counseling as it complicates your situation further.
Hesitate to contact an attorney if you believe the bank is not adhering to laws or policies and procedures.

For more information about avoiding foreclosure, visit the HUD website at this link.  You can also find a list of HUD-approved housing counselors in Georgia at this link.

Additional resources:

Hardest Hit Funds - this program is for homeowners who have lost their jobs.

How to avoid loan scams.

For FHA loans: Call the National Servicing Center  at (877) 622-8525. They will create a ticket, assign a caseworker and  advocate with the servicer.

Fannie Mae Mortgage Help Center -  available to help the borrowers with a Fannie Mae loan complete a modification application package, ensure that all documents are included, and submit it to the servicer.  Fannie & Freddie Loan Lookup - Is your loan held by Freddie Mac or Fannie Mae?

Know Your Options:
There are many options for homeowners who are struggling with their mortgage payments. Below is just an overview of some options that may be available to you - be sure to visit KnowYourOptions.com to learn more: 

Refinance - a new loan — with new terms, interest rates and monthly payments — that completely replaces your current mortgage. Even if your home value has decreased, you may be able to refinance your loan as part of the government’s Home Affordable Refinance Program (HARP). Refinance benefits:

• Make your payment more affordable by lowering your interest rate or adjusting the terms of your loan
• No negative impact to credit score
• Stay in your home and avoid foreclosure 

Repayment Plan - an agreement between you and your mortgage company that lets you pay the past due amount on your mortgage payments over a specified time period in order to bring your mortgage up to date. Repayment plan benefits:

• Catch up on your past due payments over an extended period of time
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure

Forbearance - an offer by your mortgage company to temporarily suspend or reduce your monthly mortgage payments for a specified period of time. Forbearance benefits:

• Have time to improve your financial situation and get back on your feet
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure 

Modification - an agreement between you and your mortgage company to change the original terms of your mortgage—such as payment amount, length of loan, etc. You may be eligible for the government’s Home Affordable Modification Program (HAMP) created to help struggling homeowners. Modification benefits:

• May reduce your monthly mortgage payments to a more affordable amount
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure 

Short Sale - a short sale is the sale of a home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off your mortgage balance with the proceeds. Short sale benefits:

• Eliminate or reduce your mortgage debt
• Assistance for relocation may be available
• May be able to recover your credit score—and get another mortgage—faster than if you went through foreclosure

Deed-for-Lease - a new program that allows you to temporarily lease your home. You first transfer the ownership of your home to the mortgage company (called a Deed-in-Lieu of Foreclosure, see below) in exchange for release from your mortgage loan and payments. You can then rent the property back—at an affordable rate—and remain in the home as a tenant. Deed-for-Lease benefits:

• Stay in your home and neighborhood—no need to move or relocate
• May be able to recover your credit score faster than if you went through foreclosure
• Assistance for relocation may be available at the end of your lease
• Avoid foreclosure

Deed-in-Lieu of Foreclosure -With a Deed-in-Lieu of Foreclosure (DIL), transfer the ownership of your property to your mortgage company in exchange for a release from your mortgage loan and payments. DIL benefits:

• Eliminate or reduce your mortgage debt
• May be eligible for relocation assistance
• May be able to recover your credit score—and get another mortgage—faster than if you went through foreclosure

How Foreclosure Happens:

1. First month missed payment – your lender will contact you by letter or phone. A housing counselor can help.

2. Second month missed payment – your lender is likely to begin calling you to discuss why you have not made your payments. It is important that you take their phone calls. Talk to your lender and explain your situation and what you are trying to do to resolve it. At this time, you still may be able to make one payment to prevent yourself from falling three months behind. A housing counselor can help.

3. Third month missed payment – after the third payment is missed, you will receive a letter from your lender stating the amount you are delinquent, and that you have 30 days to bring your mortgage current. This is called a Demand Letter or Notice to Accelerate. If you do not pay the specified amount or make some type of arrangements by the given date, the lender may begin foreclosure proceedings. They are unlikely to accept less than the total due without arrangements being made if you receive this letter. You still have time to work something out with your lender. A housing counselor can still help.

4. Fourth month missed payment – now you are nearing the end of time allowed in your Demand or Notice to Accelerate Letter. When the 30 days end, if you have not paid the full amount or worked out arrangements you will be referred to your lender's attorneys. You will incur all attorney fees as part of your delinquency. A housing counselor can still help you.

5. Sheriff's or Public Trustee's Sale – the attorney will schedule a Sale. This is the actual day of foreclosure. The foreclosure process in Georgia is non-judicial. This means that the lender does not need to take you to court in order to begin foreclosure proceedings. However, there are steps that the lender must take to initiate the foreclosure. You must be at least 90 days behind on your mortgage. The lender or the lender’s attorney must advertise the intended date of foreclosure for 30 days in a legal publication in your county of residence. You may be notified of the date by mail, a notice is taped to your door, and the sale may be advertised in a local paper. The time between the Demand or Notice to Accelerate Letter and the actual Sale varies by state. In some states it can be as quick as 2-3 months. This is not the move-out date, but the end is near. You have until the date of sale to make arrangements with your lender, or pay the total amount owed, including attorney fees.

6. Redemption Period – after the sale date, you may enter a redemption period. You will be notified of your time frame on the same notice that your state uses for your Sheriff's or Public Trustee's Sale.

 Working with your Lender:

Being well organized and prepared will help your lender better understand your financial position, assess your qualification for workout options, and will likely result in a more productive conversation.

1. Be sure to have your account information handy and be prepared to provide a short explanation of why you are unable to pay your mortgage payment, or why you anticipate trouble in the near future. Is there a loss or reduction in income? Is there a medical emergency? Are you current on your loan but have not been able to refinance into better terms? 
2. If you don't have a budget, now is the time to know exactly what you are spending each month. If you can, assemble your monthly budget and have it on hand.
3. You’ll also need to have the following documents readily available:
   • Your most recent monthly mortgage statement;
   • Pay stubs or other documents showing your household’s monthly pre-tax income
   • Most recent tax return;
   • Second loan or home equity line of credit statements;
   • Account balances and minimum monthly payments on credit cards, car loans, student loans or other debt; and 
   • A short, concise description of the financial hardship that is causing – or leading to – a mortgage delinquency. 

What to Expect:

Be prepared for more than one conversation. Your lender may require you to complete a loan workout package. It is important that you complete it as soon as you receive it because in some cases the lender cannot proceed to the next step without the completed and signed documents.

Questions to ask your lender:

• How much time do you allow to complete a work-out?
• What are your obligations under the work-out package?
• What are the specifics? Be sure to ask what is due and when.
• Will a foreclosure sale of your property be put on hold while your lender looks at the possibility of a workout package?