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Tips for Preventing Foreclosure
We love that you live in Baltimore City, and we want to keep you here! If you are having difficulty making your monthly mortgage payment, taking action now can prevent foreclosure on your home. Local, state, and federal housing counselors and programs can help you get back on track as a homeowner. Read below for some tips and advice on what to do if you think you might be facing foreclosure. We’ve also provided a list of some expert resources in Baltimore to help you.
Step One: Are you in danger of foreclosure?
• If you know your bills are mounting up or if something unexpected has happened in your life and you know that your mortgage payment will be late or you won’t be able to pay it this month, start the process of getting help.
• If you have already missed one or more payments and are getting letters and phone calls from your lender, start the process of getting help. It is not too late!
Step Two: Who should I ask for professional assistance?
The very first action you need to do is call and talk with your lender. Ask for the loss-mitigation department. The longer you wait to talk with your lender, the more fees may be piling up. If you talk with them before they start working with an attorney, they may be able to help you. Some lenders may freeze your interest rate, temporarily forgive missed payments, or create special repayment plans. These may not be long-term solutions, but they could help you while you are working out your finances.
Take advantage of free foreclosure counseling. There is a network of certified housing counselors who have been specially trained to provide advice and guidance on foreclosure issues. These counseling services are provided by nonprofit agencies and are FREE. There is a national hotline, 1-888-995-HOPE, which can link you with a local housing counselor, or you can call one of these nonprofit agencies directly. Housing counselors can also work with your lender on your behalf. See below in the ‘resources’ section for contact information.
Step Three: What are my options?
• Modify your payments: Ask your lender to consider a ‘workout’ or loan modification. If your lender is willing to work with you, they may freeze your payments, forgive missed payments, delay your payments for a short period of time, modify your mortgage or create an individualized repayment plan.
• Apply for a loan: If you have a subprime loan, you may qualify for the state of Maryland’s “Bridge to HOPE” loan program. This is a no-interest loan up to $15,000 due at sale or refinancing to those who are in danger of foreclosure. There are income limits and home value limits. In Baltimore City, a 1 to 2 person household must have $94,920 or less in income, and a 3 or more person household must have $110,740 or less in income. Your house must be appraised at less than $525,091. You must be referred to this program by a state-approved housing counselor (see below for list). For more information on qualifications, visitwww.mdhope.org or call 877-462-7555.
• Refinance:
The Community Development Administration’s (CDA) Lifeline Refinance Mortgage program provides a refinancing option to Marylanders who may be facing difficulties after financing their homes with adjustable rate or other unfavorable mortgages, or with mortgages that no longer fit their financial situation. Eligibility requirements are similar to those for the “Bridge to HOPE” loan program. Please contact a CDA approved lender to see if you are eligible. More information is available at www.mdhousing.org/lifeline or 877-462-7555.
The Community Development Administration’s (CDA) Homesaver Refinance Mortgage Program provides a refinancing option to Marylanders who have sub-prime or exotic mortgages and are experiencing difficulties as a result of mortgage default, low credit scores and/or a mortgage greater than the current value of their home. More information is available at www.mdhousing.org/homesaver or 877-462-7555.
FHASecure is designed for families who are good borrowers but were steered into high-cost loans with teaser rates. This new program allows eligible homeowners to refinance into a secure, fixed-rate FHA loan even if they are in default. For more information visit www.fha.gov/fhasecure or call 1-800-CALL-FHA (1-800-225-5342).
• Sell your house: If your house is worth more than you owe, your best option may be to sell your house. Your lender can approve your plan to sell your house (usually within a specific amount of time). If you owe more than your house is worth, your lender may still approve your plan to sell your house in what is called a ‘short sale’. The lender then forgives the difference between the sale price and the amount that you owe. You can also consider ‘deed in lieu of foreclosure’ in which you ‘give back’ your property and the debt is forgiven.
ResourcesLegal Help
There are many companies that will offer to help you keep your home for a fee. This is not your only option, nor do these companies have more power with your lender than you do. Be wary of companies that contact you before you contact them! Before signing any documents or refinancing your home contact a lawyer. See below for a list of Baltimore nonprofit agencies who can provide you with legal advice.
St. Ambrose Housing Aid Center (www.stambros.org) or 410-366-8550
Legal Aid Bureau (www.mdlab.org) or 410-951-7777
Civil Justice (www.civiljusticenetwork.org) or 410-706-0174
Housing Counselors
For a complete list of Baltimore City-approved homeownership counseling agencies (for help purchasing a home) click here.
The below counselors are federal and/or state-approved to help with default and delinquency (foreclosure) counseling.
Acorn Housing Corporation – 16 W. 25th Street, 410-243-9791
Belair-Edison Neighborhoods, Inc. – 3412 Belair Road, 410-485-8422
Druid Heights CDC – 2140 McCulloh Street, 410-523-1350
Greater Baltimore Urban League – 512 Orchard Street, 410-523-8150
Neighborhood Housing Services, Inc – 244 N. Patterson Park Avenue, 410-327-1200
Southeast CDC – 3700 Eastern Avenue, 410-342-3234
St. Ambrose Housing Aid Center – 321 E. 25th Street, 410-366-8550
The Development Corporation of NW Baltimore – 3521 W. Belvedere Avenue, 410-578-7190
Tri-Churches Housing, Inc. – 815 Scott Street, 410-385-1463
Resources on the Web
• Baltimore Homeownership Preservation Coalition
• HUD Tips for Avoiding Foreclosure
• Federal Housing Administration (FHA)
• MD Department of Housing and Community Development
• Neighborworks Center for Foreclosure Solutions
• Homeownership Preservation Foundation
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