"If you cannot find any buyers see if your lender"
If you cannot find any buyers, see if your lender will accept your deed in lieu of foreclosure. This Are You will help you avoid owing any additional money, if the lender would have foreclosed. However, this will appear on your credit report. You may Having also still owe taxes on the amount that you still owe the lender. An Educational Trouble Message from Paying Your A Garden State Consumer Credit Counseling Organization 225 Willowbrook Road Mortgage? Freehold, New Jersey 07728 1-800-99-BILLS www.novadebt.org Other Office Locations: Consequences Woodbridge, NJ Knowing the status of your tax situation is Rockville Centre, NY critical. You should ensure that your real estate taxes are paid current or you risk losing your Raleigh, NC property at a tax sale. Dallas, TX San Diego, CA A deed in lieu, short sale or loan modification may have Federal or State tax consequences. You should consult your tax advisor for more information. If you are having problems and are in need of professional advice, please call 1-866-472-4557. Did you know that mortgage defaults are at an Government I CONTACT YOUR PRIVATE all time high in the United States? That means Mortgage Loans MORTGAGE INSURER that you are not alone and that your mortgage Private Mortgage Insurance is required when company is familiar with people in your situation. Some mortgages are owned by the government you are putting less that 20% down as a down Many mortgage companies now have programs through Fannie Mae or Freddie Mac. Both have payment. The insurance is there to help cover that can help. very good mortgage default programs that focus the risk of default. This Private Mortgage Insurer on foreclosure prevention. You may contact Fannie may be able to help you by lending you money What Should Mae or Freddie Mac to find out about their to help prevent foreclosure. You Do First? programs that may include interest reductions, I SELL YOUR HOME term extensions, or reduced payments for up to If you want to keep your house and you are 18 months. having trouble with your mortgage payments, You may decide that you can no longer afford the first thing you should do is contact your your home and the next option is to sell before mortgage lender. Lenders want you to continue Fannie Mae foreclosure. Ideally, you want to find a buyer to make payments, therefore, many of 202-752-7000 who is willing to pay what you owe your lender. them will try to work something out. Some of Beware of people who advertise as pre-foreclosure the programs lenders offer include: Freddie Mac investors. Even if you transfer the deed to an • Reduced payments investor, you are still liable for the mortgage. 800-FREDDIE • Reduced interest rates Some investors will collect a payment from you (373-3343) • Apply any prepayments to the past due amount and never pay on the mortgage. You can check • Payment of interest only pre-foreclosure investors out with the Department • Suspension of payments of Real Estate. • Allow you to make up any missed payments Other Alternatives I TRY ANOTHER LENDER over a period of time, interest free If you cannot find a buyer who will pay this If you have tried to negotiate with your lender, amount, some lenders will agree to a ‘short sale’. One of the programs some lenders offer includes but can not work something out, you may want When a lender agrees to a ‘short sale’ they are rewriting your mortgage. If this is something you to contact another mortgage lender. You would agreeing to accept an amount for less than you are considering, there are certain things to look want to find a lender that will lend you money owe and will forego the rest. This is mainly for out for. Some of those things are large balloon to pay off your first loan. Most lenders have people experiencing a major financial or medical payments, prepayment penalties, increasing information on hundreds of loans. Keep in mind interest rates, points, and negative amortization. hardship i.e. illness, death, divorce, loss of job. that they will be taking a look at your credit You may find that you still may not be able to In order to get approval for a ‘short sale’, most record. Again, make sure that you can afford afford the home, even after the mortgage has lenders require documentation proving your the new loan. You may want to rework your been rewritten. It may be wise to rework your hardship. budget, so that this situation doesn’t happen budget. For help with budgeting and housing again. Look out for some of the same things related issues, you can call us at 1-866-472-4557. you would look for if you were considering having your mortgage rewritten. Revised 8/1/08