When Debt Mounts, Take Action To Prevent Foreclosure

If your bills are piling up and you are worried about losing your home, you're not alone. As a rise in foreclosure rate shows, thousands of Americans are touched by foreclosure yearly. But many of these homeowners could prevent foreclosure, if they sought help sooner from their mortgage company or with a toll-free, confidential hotline.

Unfortunately, according to a national poll that was funded by the Homeownership Preservation Foundation, over fifty percent of American homeowners would not contact their mortgage company for help if faced with delinquent payments. 

Fortunately, a lot of foreclosures could be prevented if homeowners called their mortgage company or the Foundation's toll-free hotline-(888) 995-HOPE-the moment they identify that they might have a problem paying their mortgage.  The longer homeowners wait to call for help, the fewer options they have. 

If you are a homeowner whose debt is continuing to increase and you're seeing that you're having increasingly difficulty paying your bills, think about taking the following action: 

1.   Take a closer look at your bills - unopened envelopes or a progressively increasing pile of bills from utility companies, your mortgage company, et cetera, are the most immediate signs you have trouble. 

2.   Open letters from your mortgage company and other creditors.  Do not ignore these letters.  Ignorin these letters will only complicate things and increase the problems. 

3.   Admit that you have a problem and devote yourself to getting help.  If you avoid contact with your mortgage company and other creditors, you are risking losing your home, and you will also damage your credit. 

4.   Don't take it on yourself.  Call your lender for help.  Contact your mortgage company to know what your options are. 

5.   If you don't feel comfortable calling your mortgage company, then you can call the Homeownership Preservation Foundation at (888) 995-HOPE to receive free foreclosure advice from counselors who work for HUD-certified nonprofit agencies.   

6.   Be careful with phony counseling agencies (deal only with HUD-certified agencies), as well as offers you get in the mail or by phone that seem too good to be true. 

7.   Develop an action plan that focuses your resources on family essentials (shelter, food, health care, basic utilities, and transportation). 

8.   Don’t sign any papers if you don't understand them.   

9.   Determine if you have the cash flow to continue paying your mortgage or if you should refinance your current mortgage.  This will help you decide if it is better if you sell your home and find less expensive housing. 

10.   Set a long-term goal of getting and staying out of debt and ensuring solid cash flow.