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The Foreclosure Survival Guide

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									The Foreclosure Survival Guide
              It’s a national crisis:
              Could you be at risk of
              losing your home?
Millions of mortgages written in the last few years have ended in foreclosure.
The first wave hit about a year ago, and in the next few months, we’ll see many
more. Find out if you’re at risk, and where to find help.


Who should worry?                                        Find an interest-rate                         How can counseling help?
                                                         explanation.
You should be concerned if you’re having                                                               A housing counseling or credit counseling
trouble making your mortgage payments,                   You’ll want to check whether that rate is     agency will review your case and contact
for whatever reason. You may be dealing                  fixed for 15 or 30 years or set to change     your lending institution. The counselors
with illness or unemployment, instead                    after a much shorter period. Some loans       will work on your behalf and will know
of the kinds of loans that sparked the                   have fixed rates for a limited period, then   about options that might benefit you.
current crisis. If you’ve missed mortgage                adjust to higher payments.                    For example, they might work with your
payments or are struggling to pay your                                                                 lender to get you more time to pay, or
mortgage for any reason, seek help.                                                                    work out a plan for you to catch up, or
                                                                                                       renegotiate the original terms of your
Even if you’re not struggling now, you                   Is it too late to avoid                       mortgage. They may be able to get your
could face a problem in the future.                      foreclosure?                                  bank to agree to take your home without
                                                                                                       going through the process of foreclosure
                                                         It depends. If you are more than 60 days
                                                                                                       or a sheriff’s sale.
                                                         late on your mortgage, you will get—or
Reasons to worry                                         may already have gotten—a letter from         Counselors also may be able to help you
ArMs: You should worry if you have an                    your loan servicer, the company that          address your problem and minimize the
adjustable rate mortgage (ARM) about                     collects your mortgage payments for your      damage to your credit report.
to “reset” to a much higher rate. Not                    lender. The most important thing to do is
long ago, when the housing market was                    open that letter, and take action.
strong, mortgage companies and brokers                   That letter may include a phone number        Will a counselor be able
aggressively marketed these loans with                   to call for help or a list of housing         to save my house?
low teaser rates to moderate-income                      counselors. If you have thrown these
people, encouraging them to buy more                     letters away, or misplaced them, call         Not always. For example, a borrower’s
home than they could afford. Many of                     one of the numbers in the help list in        income may not be high enough to
these homebuyers thought that once the                   this brochure.                                support payments on the house. In other
loan rates were reset, they would be able                                                              cases, homeowners owe more than their
to refinance their homes and still afford                do: open that letter from your loan           house is worth, which makes it difficult
the payments. But then the housing                       servicer! It’s important to take action as    for them to correct their situation by
market weakened, and refinancing                         soon as possible. Call for an appointment     getting a new loan at a lower interest
became difficult.                                        right now.                                    rate. But sometimes, even difficult
                                                                                                       situations like these can be resolved.
Creative financing: You should
                                                                                                       The best way to find out is to call for an
worry if you have a decent income and
good credit and were offered creative                    How quickly can I get help?                   appointment right away. The longer you
                                                                                                       wait, the harder it is to resolve
financing—such as Option ARMs,
                                                         Usually, you can get an appointment           the problem.
80/20 loans or interest-only loans—to
                                                         with a counselor right away. But a lot
encourage you to buy more home than
                                                         of people need help, so if you can’t get
you could afford. Many homeowners
                                                         an appointment right away, try another
took loans that stretched their resources,
                                                         agency. The options available for help,
and they could be facing trouble soon.
do: look at your loan documents.
                                                         and how long each takes, depend on
                                                         the kind of loan you have and your                Here is a sample
Even if you think you know the terms
of your loan, it’s worth a review. Many
                                                         circumstances.
                                                         Bottom line: In most cases, you probably
                                                                                                           of a letter sent by
people who think they have a fixed-rate
mortgage (one in which the interest rate
                                                         won’t be forced out of your house for a
                                                         while. But it’s important to act quickly so
                                                                                                           a bank if you are
doesn’t change) have been surprised to
find out that they don’t.
                                                         the situation doesn’t get any worse. The
                                                         longer you wait, the harder and costlier
                                                                                                           behind in your
                                                         the problem gets.                                 mortgage
A publication of the Federal Reserve Bank of St. Louis, in cooperation
with the Federal Reserve Bank of Philadelphia.
AVOID THESE PITFALLS                                                         Get help if…
don’t: Assume that ads or Internet offers for foreclosure relief             •	 You	don’t	understand	your	loan	
are legitimate. These are often companies that take your money and              documents;
disappear. Many make a point to sound friendly and understanding and         •	 Your	mortgage	payment	has	
make tempting claims, like “credit scores don’t matter” and “we’ll save         suddenly increased dramatically;
your house and cut your payments in half.” Some scour public records
and send out letters to those facing foreclosures. Be suspicious. The        •	 You	have	a	fixed-rate	mortgage	
best call you can make for legitimate help, besides the agencies listed in      and have missed one or more
this brochure, is the Department of Housing and Urban Development               payments;
(HUD), 1-800-569-4287.
                                                                             •	 You	have	refinanced	your	
don’t: Assume that you have a fixed-rate mortgage. Check your                   original mortgage at a much
original documents.                                                             higher rate.
don’t: Hand over cash to anyone without talking with a                       do: Call a credit or housing
HUD-approved agency.                                                         counselor and make an
                                                                             appointment. The counselor
                                                                             can explain the terms of your loan,
                                                                             can help you figure out if your
                                                                             ARM can be changed to a fixed-rate
                                                                                mortgage, and can help with
                                                                                                 other mortgage
                                                                                                  issues.




                                                                                       EMERGENCY
                                                                                       HOTLINES
                                                                                       HoPE hotline:
                                                                                      1-888-995-HOPE
                                                                                     (This national hotline may
                                                                                    have a high volume of calls.
                                                                                    Be persistent.)
                                                                                    Hud: 1-800-569-4287 will help
                                                                                   you find an approved housing
                                                                                   counselor. Or you can visit www.
                                                                                   hud.gov/offices/hsg/sfh/hcc/
                                                                                   hcc_home.cfm.
WHERE TO GET HELP
HOPE Hotline: 1-888-995-HOPE
you may call the national hotline          HoPE of Evansville                     Jackson Housing Authority
or one of the numbers on this select       608 Cherry St.                         125 Preston St.
list of agencies in the states served by   Evansville, IN 47713                   Jackson, TN 38301
the Federal Reserve Bank of St. Louis.     812-423-3169                           731-422-1671
                                           www.hopein.com
Call today, and don’t be discouraged                                              West tn legal services
if you can’t reach someone right away.     Community Action Program               P.O. Box 2066
Be persistent, and get help as soon        of Evansville                          Jackson, TN 38302
as you can.                                27 Pasco Ave.                          731-423-0616
                                           Evansville, IN 47713                   www.wtls.org
                                           812-425-4241
                                           www.capeevansville.org                 MIssIssIPPI
ArkAnsAs
                                                                                  Enterprise Corporation
                                           Housing Partnership Inc.
Credit Counseling of Arkansas                                                     of the delta/HoPE Community
                                           (See Kentucky listing.)
1111 E. Zion Rd                                                                   Credit union
Fayetteville, AR 72703                                                            4 Old River Place
                                           kEntuCky                               Jackson, MS 39202
479-521-8877
1-800-889-4916                             don’t Borrow trouble                   601-944-1100
ccoa@ccoacares.com                         1-866-830-7868                         www.ecd.org
www.ccoacares.com                          www.dontborrowtrouble.com              MIssourI
Family services Agency, Consumer           louisville Metro                       Beyond Housing
Credit Counseling service                  Dial 2-1-1                             4156 Manchester Ave.
740 S. Salem Road, Suite 104               www.louisvilleky.gov/foreclosure       St. Louis, MO 63110
Conway, AR 72032                                                                  314-533-0600
501-450-9399                               Housing Partnership Inc.               www.beyondhousing.org
1-800-255-2227                             333 Guthrie Green, Suite 404
wcohns@fsainc.org                          Louisville, KY 40202                   Better Family life
www.helpingfamilies.org                    502-585-5451                           724 N. Union, Suite 301
                                           www.housingpartnershipinc.org          St. Louis, MO 63108
southern Good Faith Fund                                                          314-367-3440
2304 W. 29th Ave.                          louisville urban league                www.betterfamilylife.org
Pine Bluff, AR 71603                       1535 W. Broadway
870-535-6233                               Louisville, KY 40203                   urban league of Metro st. louis
aduran@southerngff.org                     502-561-6830                           3701 Grandel Square
www.goodfaithfund.org                      www.lul.org                            St. Louis, MO 63108
                                                                                  314-615-3600
IllInoIs                                   legal Aid society                      www.ulstl.org
Beyond Housing Illinois                    416 W. Muhammad Ali Blvd., Suite 300
Homeownership Center                       Louisville, KY 40202                   Catholic Charities
2 Park Place                               502-584-1254                           Housing resource Center
Swansea, IL 62226                          1-800-292-1862                         4532 Lindell Blvd.
618-233-4990                               www.laslou.org                         St. Louis, MO 63108
www.beyondhousing.org                                                             314-367-5500
                                           tEnnEssEE                              www.ccstl.org/Services/CCHRC.html
Western Egyptian Economic
                                           Memphis Housing                        Consumer Credit Counseling service
opportunity Council
                                           Counseling network                     1515 S. Glenstone
1130 N. Sparta
                                           1548 Poplar                            Springfield, MO 65804
Steeleville, IL 62288
                                           Memphis, TN 38104                      1-800-882-0808
618-965-3193
                                           901-725-8361                           www.cccsoftheozarks.org
www.weeoc.org/Homebuy/homebuyer.htm
                                           http://memphis.earnbenefits.org/mhcn
IndIAnA
                                           Affordable Housing CdC
Indiana statewide                          206 E. Main St.
Foreclosure Hotline                        Jackson, TN 38301
1-877-GET-HOPE                             731-422-1366
www.877gethope.org                         www.affordablehousing.tn.org
                                                                                                               CA0824 9/09

								
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