Brenda Williams is the Director of Financial Literacy for the Department of the Treasury in North Carolina. On January 24, Brenda attended the Help for Homeowners event in Charlotte to speak on a Community Partner Roundtable moderated by the U.S. Treasury. This event offered community leaders and industry professionals the opportunity to learn more about the various Making Home Affordable (MHA) programs. Topics included the impact of MHA in the marketplace, other local and national approaches to foreclosure prevention, and liquidation as a foreclosure prevention strategy.
As we continue to face tough economic times, a growing number of families are struggling to maintain their mortgage payment. Brenda provides 5 common mistakes homeowners make when facing foreclosure and how to best avoid making these mistakes:
1) Ignoring the Problem: Often homeowners become overwhelmed with their financial challenges and begin avoiding their mortgage lender. Contact your lender as soon as you lose your job or begin to face other financial hardships. They can help you identify programs available to keep you in your home or help you transition to a more affordable housing situation.
2) Walking away from your home too soon: If you can no longer afford your payments, don’t assume foreclosure is your only option. Loan modification, short sale, or deed in lieu of foreclosure are a few options that your lender can help you explore.
3) Not seeking expert advice: Avoid taking advice from individuals that may have limited or inaccurate information about the laws and processes involved with foreclosures. What worked for your friend or family member may not be appropriate for you. HUD Approved Housing Counselors can work with you and your lender to determine the best option given your circumstances.
4) Agreeing to an unrealistic payment plan: Homeowners often agree to a “catch up” plan they cannot afford. If you cannot make your regular payment, it is unlikely you can pay an amount over and above. Before agreeing to a payment plan, meet with a housing counselor to evaluate your finances and establish a budget.
5) Falling victim to scams: There are a growing number of scams related to foreclosure prevention Avoid companies that charge upfront fees to assist you with saving your home. Never make payments to anyone other than your lender without their permission. For more information about foreclosure prevention programs, visit www.makinghomeaffordable.gov.
To learn more about financial literacy initiatives, please visit the Department’s website.