What To Do If You're Facing Foreclosure

The latest numbers on foreclosures suggest there has been a pronounced slowdown in the process in the first half of 2011. But that doesn't seem to be the case in Oregon.

There, the state's foreclosure rate spiked 236 percent in April. If it is true lenders have delayed some foreclosures until problems with the process are resolved, then there could be another flood of foreclosures nationwide once the process begins again in earnest.

Oregon Attorney General John Kroger has issued advice to homeowners in his state who are in danger of foreclosure. It's probably good advice, no matter where you live.

• Get help right away. If you receive a foreclosure notice or are having a hard time making your mortgage payments, seek help right away. You may be able to obtain forbearance or a loan modification. Call 1-888-995-HOPE or visit www.hopenow.com to get connected with free counseling or assistance contacting your mortgage company. The FTC's mortgage website also provides lots of important information for homeowners facing foreclosure. While the modification process has been a nightmare for many homeowners, lenders, under government pressure, appear to be cleaning up their acts. Too late for millions, but maybe not for you.
• Make sure your counselor is HUD-approved. If you decide to work with a foreclosure counselor, make sure they are HUD-approved. Scammers may contact you by mail, on the phone, online or in person, and sometimes try to appear associated with your lender or the government. Ask your counselor if their agency is HUD-approved, and then double check for yourself. Visit the HUD website or call 1-877-483-1515 to confirm that your counselor is HUD-approved.
• Never agree to pay up-front fees for foreclosure counseling. Up-front fees are illegal under Oregon law. Charging excessive up-front fees is one of the most common foreclosure relief scams.
• Keep a record of everything you do. When working with your mortgage company, keep excellent records. Note the times and days that you call and the name of the representative who you speak with. Make copies of every document you sign or provide to your lender during the loan modification process. Write down the confirmation number and dates of every transaction. If problems develop, your notes and records will help you reach a resolution faster.
• Don't get scammed. Those who are facing foreclosure are particularly vulnerable to scams. That is why DOJ aggressively pursues mortgage and foreclosure fraud. Mortgage-related scams can include phony offers of counseling or help, cons where homeowners unknowingly sign away their home, and lease-to-own schemes where a scammer purports to sell a house and pockets all the payments. Learn to spot the signs of a scam.