Don't Become a Foreclosure Victim
Markell Encourages Delawareans to Protect Their Homes, Credit Scores
Dover - With the current crisis in the mortgage market and every county in Delaware recording an increase in foreclosure filings over last year, State Treasurer Jack Markell encourages Delawareans to be pro-active in protecting their homes and their credit scores.
"It is devastating, both personally and financially, for someone to lose a home after working so hard to achieve the American dream of home ownership," Mr. Markell said. "People who experience credit problems can have issues for years to come, which can mean higher interest rates and fewer borrowing options."
Foreclosure filings in Delaware have increased year over year in July by 34% in New Castle County, 43% in Kent County, and 54% in Sussex County.
"The most important thing a homeowner who begins having problems in making their payments can do is to reach out and make contact with their lender as soon as possible," Mr. Markell stated. "By working with their lender, homeowners can often reach terms to allow the homeowner to stay in their home and minimize the potential financial damage incurred after a foreclosure."
The Office of the State Treasurer's Tomorrow's Money website provides specific information about what to do when it becomes difficult to pay your mortgage and offers the following tips:
Contact your lender. While you may be afraid or embarrassed to face this situation head on, the truth is that most lenders want to work with you. They have a financial stake in seeing you avoid foreclosure - it can cost lenders up to 20 percent of the remaining principal balance on your home to foreclose. Lenders want their money back - not a physical home to have to resell.
Do not ignore your lenders' letters or calls. If you can't make your mortgage payment, or you can't make the total mortgage payment amount, contact your lender immediately. Technically your mortgage is in default when you have not made your payment by close of business the day it's due. Lenders can begin the foreclosure process anytime after that point. The good news, however, is that most lenders want to avoid foreclosure and will work with you to do so. In fact the secondary mortgage market associations -- Fannie Mae, Freddie Mac as well as the Federal Housing Administration (FHA) -- require their mortgage companies to work with borrowers to avoid foreclosure if at all possible.
It is your responsibility to get in touch as soon as possible with your lender and let them know that you want to remain current on your mortgage but you need help. Your lender will probably put you in touch with a workout specialist in its Loss Mitigation or Loss Recovery Department. Be prepared to explain why you can't make the payment, how much income you're currently making and what your other monthly expenses are. Keep a record of when you call and who you talk to and follow up each phone conversation with a letter if possible, keeping a copy for yourself.
If you are contacted by someone by phone, ask them to send you something in writing to verify that they are employees at your lending institution. Do not send payment by check made out to anyone other than your lender to any address other than your lender's address. Do not authorize anyone to charge a mortgage payment to your credit card by phone.
Stay in the home. If you abandon the home and don't make your payments, your bank will assume that you are not able or wiling to maintain the mortgage and they will foreclose quickly so they can re-sell the home and minimize their losses.
Get legal advice or professional help. If you need help, ask for it. Seek out a non-profit. Their only business is to help you. Call the Delaware Help Line at 800/464-4357 and ask for information about housing counseling to locate help near you. The U.S. Department of Housing and Urban Development has a toll-free hotline available 24/7. Call toll-free 888/995HOPE or visit www.995HOPE.org to talk with a HUD-certified housing counselor. Don't be rushed to sign anything, especially if you feel someone is pushing you to file for bankruptcy or to allow foreclosure to happen before you understand and have considered all your options.
Contact a local housing counseling agency. These agencies offer help free of charge and can provide you with information on local services and programs that may be of help to you. For a detailed list of HUD approved counseling agencies, visit www.Treasurer.Delaware.gov and select the Tomorrow's Money portal.
Explore assistance options. A nonprofit housing agency or your lender may be able to give you information on assistance options you may qualify for. For example, you may qualify for Supplement Security Income (SSI) if you are an older homeowner, or local tax abatement programs. If utility and energy costs are becoming an increasing cost and concern, contact your utility companies to discuss possible payment plans and assistance options. The Delaware State Housing Authority's Delaware Emergency Mortgage Assistance Program (DEMAP) provides Delaware homeowners with assistance in preventing residential mortgage foreclosures that result from circumstances beyond the homeowner's control. For more information about the DEMAP program, visit the State Housing's Authority Website www.DEStateHousing.com or call 888/363-8808.
