What happens if I miss my mortgage payments or get behind in my mortgage payments?
Foreclosure may occur, but it doesn’t have to. You can take action to save your home. It is never too late to get help. By seeking help early, there is a greater chance of success in avoiding foreclosure. As soon as you anticipate problems in paying your mortgage payment, contact your mortgage servicer to explain your current financial situation. Many servicers are willing to work with you if you contact them immediately, because they understand that individuals and families can face temporary job loss, serious illness, or other major life events that can impact their ability to pay their mortgage. Use the phone numbers found here, and ask for your loan servicer’s Loss Mitigation Department. Ask if you can participate in a “work out” resolution or obtain a loan modification. Be honest with the loss mitigation staff about your situation so they can help you choose the best option.
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What is a “work out” resolution?
Generally, a “work out” resolution involves resuming payments and arranging to pay the past-due amount over a short period of time. Sometimes, lenders will allow a “loan modification” which might lower your interest rate or extend the final due date of your loan – making your monthly payments lower.
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Where can I go to find help?
In addition to contacting your mortgage servicer, you can call a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD) or a local resource in your area. These counselors are experienced in communicating with mortgage servicers and are able to determine where you are in the process and what “work out” options are available to you.
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Would my mortgage company rather foreclose on my home than keep me in it?
On average, a mortgage company sustains a $50,000 loss in the event of a foreclosure. These companies are in the business of providing and servicing mortgages and would prefer not to own or sell homes. If possible, they would prefer to keep you in your home.
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Is foreclosure uncommon?
Foreclosure is a challenge faced every year by thousands of Ohioans from all walks of life. You are not alone, but you need to take action to save your home.
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What should I do if I get a foreclosure notice?
Call your servicer immediately to discuss alternatives to foreclosure. You have 28 days from the date you receive the foreclosure complaint to file an answer with the court and with your mortgage servicer’s attorney. An answer may be written in a legal format or in letter form. This is an important step in protecting your legal interests.
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Should I continue to live in my home?
Yes, you are in a far better position to save your home by continuing to live in it. If you abandon your property, you may not qualify for assistance.
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How long does a foreclosure take?
The legal proceedings may take anywhere from six months to one year or more.
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Should I be aware of anything else?
Beware of scams! Solutions that sound too simple or too good to be true usually are. Unfortunately, there are people who may try to take advantage of your financial difficulty. Once your loan is in the foreclosure process, you may be contacted by those who will tell you that they can “help” you keep your house. Be cautious. Most of the time, these self-proclaimed specialists charge a hefty fee for services that are worthless or that you can perform for yourself just by calling your servicer's Loss Mitigation Department or by calling a HUD-approved housing counselor. The best way to avoid scams is to work directly with your mortgage company and a HUD-approved housing counselor.
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Are all offers to “help” scams?
Because of the public nature of foreclosures, anyone can access foreclosure listings on a daily basis. These include the owner's name and address and could include other sensitive information. Armed with this data, individuals pitch their scam to take advantage of a desperate owner.
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Can I retain my house after it goes to sheriff’s sale?
You may retain ownership of your home (and continue to live in it) up until the time that the confirmation of sale has been filed with the court.
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When do I actually have to leave the house?
You should be prepared to vacate the property once the foreclosure sale has been confirmed, which usually takes place 30 days to 60 days after the foreclosure sale. If you choose not to vacate the property, an eviction notice will be placed on your door informing you of the date you will be evicted by the sheriff. Your personal belongings will be placed outside your home and eventually removed. If you have not made alternative living arrangements, a HUD-approved housing counseling agency can refer you to community services in your area.
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Should I consider refinancing?
Being able to refinance your loan depends on several factors. If you are already behind on your mortgage, your credit rating will be adversely affected. This could prevent you from obtaining a new mortgage at a reasonable interest rate. In addition, you may not be able to afford the fees and points that most lenders charge, especially if you have little or no equity in your home. If you do want to refinance, shop around for the best rate and terms possible and be alert for predatory lending practices.
You may have the opportunity to refinance with the Ohio Housing Finance Agency’s Opportunity Loan Refinance Program, which offers affordable, 30-year fixed-rate financing. Click here for information on the Opportunity Loan. Refinance opportunities also exist with FHASecure through the federal government. Click here for information on FHASecure.
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Where can I file a complaint if I believe I have been a victim of predatory lending?
Complaints regarding predatory lending can be filed with the Ohio Attorney General's Office at 1-800-282-0515 and the Ohio Department of Commerce, Office of Consumer Affairs at 1-866-278-0003.
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What Are the Main Points I Should Remember?
- Act now and don't ignore the problem!
- Contact your mortgage servicer as soon as you realize that you have a problem.
- Open and respond to all mail from your servicer.
- Contact a HUD-approved housing counselor.
- Stay in your home to make sure you qualify for assistance.
- Understand Ohio’s foreclosure process.
- Understand foreclosure prevention options and alternatives.
- Beware of scams.
- Do not sign any document that you don't understand.
Act now and don't ignore the problem!
Sources: Save the Dream, HUD, HopeNow, Ohio Treasurer of State
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