Avoiding Foreclosure on Your Home

(This article first appeared in the May/June 2020 issue of the American Postal Worker magazine)

Due to the outbreak of the coronavirus, millions of people are facing foreclosure and financial difficulties. There are actions that homeowners can take and programs that are available to assist. The Better Business Bureau (BBB) and U.S. Department of Housing and Urban Development (HUD) offer the following checklist to improve your chances of keeping ownership of your home:

Don’t ignore the problem – The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

Contact your lender – Ask for the Loss Mitigation or Collection Department, where borrowers and the lender work together to avoid a foreclosure.

Open and respond to mail from your lender – Discuss your situation honestly. Give the lender specialist an accurate account of all bills and statements. Don’t under or over exaggerate the situation.

Review the terms of your mortgage – Find out how much equity you have in your home. Review penalties or restrictions for refinancing. Learn about the foreclosure laws and time frames in your state by contacting the State Government Housing Office.

Understand foreclosure prevention options – Valuable information about foreclosure prevention can be found at fha.gov/foreclosure/index.cfm.

Prioritize your spending – After health care, keeping your house should be your first priority. Review your finances and see where you can cut spending: cable TV, gym memberships, entertainment, etc. Contact your credit card companies to delay or reduce payments.

Consider your options – The lender may approve a temporary exception from the full monthly payment to help the homeowner resolve financial issues and resume normal payments later.

Apply for an Emergency Hardship Loan – The Federal Employee Education & Assistance Fund (FEEA) offers emergency hardship no-interest loans for a maximum of $1,500 for postal employees with more than 1 year of employment. For information visit feea.org/emergency.

Be Aware of Foreclosure “Rescue” Scams – Be aware of con artists who scam homeowners into moving out and deeding their property over to a third party. The original owner is told that they can rent the property with the option to buy it back later. However, he/she cannot afford the rent and is evicted, or try to buy back the property, but the price is too high.

Avoid foreclosure prevention companies – Many for-profit companies will contact you promising to negotiate with your lender. They charge a large fee for services your lender or a HUD-approved housing counselor will provide for free.

If you are unable to reach a satisfactory conclusion, HUD offers free or very low-cost housing counseling nationwide to help you understand the law and represents you in negotiations with your lender. To find a HUDapproved housing counselor near you, call 800-569-4287 or TTY 800-877-8339.

In closing, I would like to thank Postal Employees, who put their lives in jeopardy by going to work each day to serve the American People. May God Bless You and Your Families, Be Blessed and Be Safe!

Resources: The text in this article was taken from U.S. Department of Housing and Urban Development’s (HUD) Tips for Avoiding Foreclosure webpage and the Federal Employee Education & Assistance Fund, Emergency Hardship Loans.