Consult With a Counselor

• Consult with a HUD-certified foreclosure counselor to determine your mortgage assistance options. A counselor certified by the U.S. Department of Housing and Urban Development can help you determine whether saving your home or relocating is the best option given your financial circumstances. If you choose to apply for foreclosure assistance, a counselor will help you prepare a proposal for your lender, inclusive of a hardship letter and documentation of your circumstances. A hardship letter is a detailed explanation of events that occurred leading to your delinquency. Foreclosure stops temporarily while your loan account is under review.
  
  

How to Choose an Assistance Option

• Mortgage assistance options vary based on the circumstances of the homeowner. After the foreclosure process begins, mortgage modification is a viable option, but it can significantly reduce your monthly payments each month. If you have a predatory mortgage loan or experienced a permanent loss in income, a mortgage loan modification may be your best option. Alternatively, forbearance is suitable if your loss in income is temporary. Forbearance occurs when your mortgage payments are temporarily suspended or reduced. At the end of the forbearance period, your payments resume along with a lump sum payment corresponding to the payments you missed during forbearance.
  
  

Who Can Help

• Both private and public agencies are available to help you stop foreclosure on your home. The federal Making Home Affordable Program generally provides homeowners with the option of refinancing to obtain a lower interest rate or modifying their mortgage loan. However, in order to qualify for a refinance with Making Home Affordable, you must be current on your mortgage loan payments.
  
  Getting help from the Neighborhood Assistance Corporation of America (NACA) is appropriate if you prefer to have someone else negotiate on your behalf. NACA is a nonprofit mortgage brokerage with HUD-certified counselors to guide you through the mortgage assistance process. In order to use NACA, you must undergo financial counseling.
  
  

Honor Your Agreements

• No matter the option you choose to save your home, ensure you honor your commitment. With mortgage modification, many programs require that homeowners undergo a trial period before changes become permanent. Late or missed payments on your modified loan can result in continuation of foreclosure proceedings. If you have no income to support new payments, there are still ways to avoid foreclosure, such as using Making Home Affordable's Unemployment Program (UP). However, you must also qualify for unemployment benefits in order to use this option.