HOUSING-MORTGAGE FORECLOSURE CRISIS
Many of our members are concerned that the foreclosure crisis could directly impact themselves, their children and their neighborhoods, and others worry about how a drop in home values will affect their retirement nest eggs. It is important to know that:
- Older homeowners are often targeted by abusive lenders and brokers because they are cash-poor but equity-rich. When they need to tap into the equity in their homes to pay for emergencies and necessities, they can fall prey to abusive lending practices.
- Homeowners at risk of foreclosure can contact local non-profit housing counselors that can help set up a mortgage payment budget or offer advice on local support services.
- Homeowners should also try working with their mortgage lenders to establish a new payment plan that works for both sides. It always is important to respond to letters and phone calls from a lender. Homeowners may even be able to refinance into a more affordable mortgage.
- It may be important to obtain legal advice, and even bankruptcy may be an option for some. Declaring bankruptcy may provide some short-term relief from creditors, but it also would damage an individual’s credit history and make it more difficult to apply for credit, or a mortgage, in the future.
FORECLOSURE PREVENTION TIPS
- Do not pay doctor bills or credit card debt ahead of the mortgage. Keep mortgage payments current if possible.
- Negotiate with the lender to restructure your mortgage. If the loan is guaranteed by a federal or state agency, the lender may be required to grant assistance, or provide other options, to avoid foreclosure.
- Sell the house before it goes into foreclosure. If your mortgage is higher than the home’s market value, you may be able to persuade the lender to allow you to sell it for less and forgive the rest of the debt.
- If you’re about to lose your home, filing for bankruptcy can stop the foreclosure process and allow you more time to try to work out a plan to keep the home. Get legal advice from an attorney specializing in bankruptcy.
FORECLOSURE - WHERE TO GO FOR HELP
- Institute for Foreclosure Legal Assistance Offers links to newly funded legal services programs, including AARP’s Legal Counsel for the Elderly. www.foreclosurelegalassistance.org.
- U.S. Department of Housing and Urban Development offers a list of HUD-approved national and regional housing counseling agencies. To contact a housing counseling agency, call 1-800-569-4287. www.hud.gov
- NeighborWorks America Nonprofit community-based revitalization program that offers foreclosure counseling programs listed by state or Zip Code. 202-220-2300. www.nw.org.
- National Community Reinvestment Coalition Nonprofit membership organization that helps underserved communities. 202-628-8866. www.ncrc.org.
- Mortgage Bankers Association New website offers consumer information and links to resources. Go to www.homeloanlearningcenter.com, then click on “Foreclosure Prevention Resource Center.”
