Released June 2, 2009
URBANA, Ill. — Believing some of the common myths about foreclosure can cost homeowners precious time and may ultimately cost them their home, said University of Illinois Extension educator Susan Taylor.
"The Homeownership Preservation Foundation, an independent, nonprofit organization, provides U.S. Department of Housing and Urban Development (HUD)-approved counseling to people facing foreclosure through their hotline at 888-995-HOPE. Here's some of the myth-busting information they want the public to know," she said.
Myth: My mortgage company would rather foreclose on my home than keep me in it. Actually, the mortgage company sustains an average loss of about $58,000 when foreclosure occurs. They are in the business of providing mortgages, not owning or selling homes—and they would always prefer to keep you in your home. Call the Homeowner's HOPE Hotline at 888-995-HOPE. They will help you work with your mortgage company to pay back your loan and stay out of foreclosure.
Myth: Foreclosure is an uncommon problem. I'm all alone in this. Actually, millions of Americans face foreclosure every year. Rich, poor, young, old--the list is as diverse as our society. If you're struggling with your mortgage payments, call 888-995-HOPE for caring, nonjudgmental advice.
Myth: I've only missed one payment. I can probably catch up. The most important thing to remember when playing catch-up is that you owe any delinquent payments plus the current month's payment. So, if you're a month behind, you actually owe two payments, last month's and this month's. If you call 888-995-HOPE before you miss a payment, more options will be available to you.
Myth: I've missed too many payments to get help. There's always time to get help. The Home Ownership Preservation Foundation can't work miracles, but they can always give expert advice in any situation. That said, the help they are able to offer is far more constrained if you're eight payments behind than if you're one or two payments behind. The sooner they can get involved, the better chance you'll have to avoid foreclosure.
Myth: I'm getting many offers of "help" from a variety of different people. Are they scams? Because of the public nature of foreclosure, anyone can access foreclosure listings daily. At the very least, the public record includes the owner's name and address; and in some states, the record could include other sensitive information. Armed with this data, scammers can take advantage of a desperate owner. Here's what to look for to avoid foreclosure scams.
1. Your home's ownership changes hands. A common scam is that a party buys your home, then lets you rent it back. It sounds good at first, but you're losing your property, and your new landlord can now legally kick you out of your home with little to no notice.
2. You're asked to pay something up front to stop making mortgage payments. Usually these scams involve paying large sums of money to some sort of "foreclosure prevention service." These services offer to do what on-the-level counselors do: counseling, help with a budget, and approaching the mortgage company to consider a payment plan. But the scammers do not always do this work thoroughly or follow through at all. Remember, foreclosure advice and direction should always be free.
3. You're under pressure to act immediately. Some scammers will prey on people who are experiencing the stress and anxiety surrounding the foreclosure process by convincing owners to sign things they don't understand. Don't sign anything without first talking to an attorney, your mortgage company, or a nonprofit foreclosure prevention organization like the Homeownership Preservation Foundation.
Myth: It's impossible to stay in my house after foreclosure proceedings begin. Contrary to what you might think, there are still options available to you after the foreclosure process has begun. The sooner you call the Home Ownership Preservation Foundation, the more tools they'll have to help you with your situation.
For more information on fighting foreclosure, saving food dollars, handling stress, avoiding money traps, deciding which bill to pay first, and more, visit U of I Extension's "Getting Through Tough Financial Times" website at http://www.ToughTimes.illinois.edu , said Taylor.
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http://www.aces.uiuc.edu/news/stories/news4806.html
Source: Susan Taylor, (708) 720-7520, setaylor@illinois.edu
Editor: Phyllis Picklesimer, (217) 244-2827, p-pickle@uiuc.edu
