Tips for avoiding foreclosure

1. Don’t ignore the problem.
   The further behind you become, the harder it will be to reinstate your loan and the more likely you will lose your house.
   
   
2. Contact your lender as soon as you realize that you have a problem.
   Lenders do not want your house. They have options to help borrowers through difficult financial times.
   
   
3. Open and respond to all mail from your lender.
   The first notices you will receive offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
   
   
4. Know your mortgage rights.
   Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
   
   
5. Understand foreclosure prevention options.
   Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at The Federal Housing Administration and The U.S. Department of Housing and Urban Development.
   
   
6. Contact a HUD-approved housing counselor.
   The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, reorganize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you by calling (800) 569-4287 or on the internet at www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm.
   
   
7. Prioritize your spending.
   After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses--cable TV, memberships, entertainment – that you can eliminate.
   
   
8. Use your assets.
   Do you have assets—a second car, jewelry, a whole life insurance policy—that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
   
   
9. Avoid foreclosure prevention companies.
   You don’t need to pay fees for foreclosure prevention help--use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.
   
   
10. Don’t lose your house to foreclosure recovery scams!
    If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD-approved housing counselor. Additional tips can be found on Freddie Mac’s “Don’t Borrow Trouble” website.
    
    For further information or if you believe you are the victim of predatory lending, visit the Miami-Dade County Housing Finance Authority website at or call their anti-predatory lending hotline at (786) 331-5348.
    
    Finally, if you believe you may be a victim of mortgage fraud, visit Miami-Dade County Mayor Carlos Alvarez’s Mortgage Fraud Task Force website at or call the Miami-Dade Police Department’s Economic Crimes Bureau at (305) 994-1000.
    
    Content provided by U.S. Department of Housing and Urban Development and Miami-Dade County.

• Home improvement contractors offering to arrange financing
• Lenders offering loans to rescue a homeowner from foreclosure
• Lenders referring rejected loans to subprime lenders that may be their affiliates
• Misrepresentations and conflicting information (verbal and written)
• Telephone solicitations, door-to-door solicitations, direct mail fliers, the internet and TV commercials offering “slow credit, no credit, no problem” loan programs
• Repeated offers to refinance
• Loans that require balloon payments
• High-pressure tactics to get you to sign the loan before reading and understanding the fine print
• Request for signatures on incomplete or blank loan documents
• Failure to provide a “Good Faith Estimate”

• Forged loan documents
• Hidden terms
• Incomplete disclosures

• Qualified borrowers steered away from affordable loans

• Low monthly payments with a large final payment

• Credit life insurance
• Credit disability insurance
• Unemployment insurance

• Penalties for paying off a loan ahead of time to keep loan continued as long as possible

• Repeated refinancing of loan balance into a new loan, sometimes without knowledge of the borrower

• Don’t let the promise of extra cash or lower monthly payments get in the way of your good judgment
• Don’t agree to a loan that is more than what you believe your house is worth
• Don’t sign documents you have not read or have blank spaces to be filled in after you sign
• Don’t take the first loan you are offered
• Don’t give in to high pressure sales tactics

When you’re at risk of losing your home: resources

• Your loan account number
• A brief explanation of your circumstances
• Recent income documents:
  • Pay stubs
  • Benefit statements from Social Security, disability, unemployment, retirement or public assistance
  • Tax returns or a year-to-date profit and loss statement
  • A list of household expenses
    
    

Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for assistance, you must complete the forms and return them to your lender quickly. The completed package will be reviewed before the lender talks about a solution with you.

Information collected through the collaborative efforts of HUD/FHA, Department of Veterans Affairs, Department of Labor, Fannie Mae, Freddie Mac, members of the Mortgage Industry-at-large, and other industry participants.

1. Pay yourself first.
2. Ask your employer to make automatic payroll deductions and deposit these amounts in your savings account.
3. Save windfall income, like a Christmas bonus.
4. Collect loose change and deposit in the bank.
5. Try frugality.
6. Break spending habits.
7. Save lunch money; bring lunch from home.
8. Save sale money.
9. Have a “buy nothing week.”
10. Comparison shop.
11. Read newspapers and circulars for sales in grocery stores.
12. Exchange information about sales, discounts, and other money-saving tips with family and friends.
13. Use coupons and discounts.
14. Take advantage of outlet stores, shop off-season, and buy clothes that will endure.
15. Don’t buy more than you need.

• Know what bills are due and when.
• A checking account will provide an easy way to pay bills and a way to help you keep track of what you spend.
• Ask the electric and gas companies if you can get on their budget plan or average payment plan.
• Know how you spend your money. Get in the habit of keeping receipts. Categorize your expenses and look for ways you can economize.
• Plan for large, periodic expenses. Make a budget calendar showing the approximate amount of these expenses and when they’re due.
• Budget for regular maintenance and unexpected repairs.
• Adhere to a regular savings plan. Many financial advisors suggest saving 5% of your take-home pay.
• Always keep an emergency fund on hand. You need to have a nest egg.
• Plan ahead for major purchases rather than making impulsive decisions.
• Put together a seasonal inspection checklist for your home and car to prevent costly repairs in the future.
• Buy do-it-yourself repair books and videos for minor home repairs.

• Save coins from your daily change. Put the coins in a piggy bank. You won’t miss them and you’ll be surprised how quickly they add up.
• After you’ve paid the last installment on your car or other loan, regularly add the same amount you’ve been paying to your savings account.
• If you get an income tax refund, deposit it in your savings account.
• Save your overtime pay instead of spending it.
• When you get a raise, save it.
• Put gifts of money received for birthdays, the holidays, or other special occasions in your savings account.
• Be sure all of your money is working for you. Deposit extra sums of cash immediately.
• Adopt a short-term “austerity” program during which you save as much as possible. Buy nothing unless you really need it. Cut out movies, eating out, entertaining or other expenses and deposit what you save.

• Do your own repairs.
• Be conscious of utilities usage – dim or turn off lights, conserve hot water, turn off air conditioning in the cooler months and limit long distance phone use.
• Plan meals.
• Shop garage sales.
• Recycle: towels, glass cups.

• Pack lunch
• Cut down on eating out.
• Consider generic foods and use coupons.
• Save and eat leftovers.
• Limit shopping to once a week.
• Plan menus, make a grocery list.

• Use public transportation.
• Carpool.
• Get rid of one car, keep the smaller car.
• Consider moving closer to work.
• Do your own repairs.

• Seek out family-oriented, inexpensive activities; use public parks and picnic areas.
• Give up smoking and drinking.
• Take vacations at home.

• Select reasonably priced cosmetics and toiletries.
• Cut your children’s hair.
• Groom your pet.
  

• Have legal aid evaluate alimony payments.
• Determine if the family benefits from two incomes.

1. Demonstrate your stability. You can demonstrate stability through your employment history, your income history, the length of time you’ve lived at your current address, owning a home, establishing and maintaining a savings account.
2. Know what’s in your credit report. You should know what’s in your credit report to be sure that all your identifying information and accounts are correct. Review your credit reports from each of the three crediting reporting agencies --- Equifax, Experian, and TransUnion – at least once a year to make sure they are accurate. Your credit report may vary from one company to another.
   • Equifax: (800) 685-1111, www.equifax.com
   • Experian: (888) 397-3742 www.experian.com
   • TransUnion: (800) 888-4213 www.transunion.com
   
   If you’ve been denied credit, you can get your report for free by following instructions in the written notice you received denying your credit. Moreover, due to changes in the federal Fair Credit Reporting Act (FCRA), consumers throughout the U.S. are able to ask for a free copy of their credit report once every 12 months from each of the credit reporting agencies. For more information, log onto www.annualcreditreport.com or call (877) 322-8228.

1. Pay your bills on time. How you’ve paid your bills in the past is usually the best indicator of how you’ll pay in the future. Be sure to pay at least the minimum amount required by the date it is due on your account statement or invoice. You can always pay more, but you should never pay less than the minimum.
   
   Remember, being late on a payment is a negative mark on your credit report even if you make up the payments later or provide extenuating circumstances, such as job loss. Also, if you’re late making payments, you may be charged a penalty fee.

1. Don’t use a credit card for a purchase unless the amount is within your monthly spending limit.
2. Limit yourself to two or three cards.
3. Pay off the balance in full each month.
4. Always pay more than the minimum payment required.
5. For large purchases, plan to pay off the amount in three monthly installments.
6. Do not consider the credit card an emergency fund.
7. Save money for trips and use the card only for convenience and safety.

• Build up a network of people who work in your chosen field and know your job interests.
• Contact your trade union or professional organization and let other members know you are looking for a job.
• Be flexible – do not limit yourself to one industry or one type of job.
• Evaluate your career so far – you will likely be amazed at your base of skills.
• Contact temporary agencies devoted to your particular type of work and find out whether they charge for their services (look for these agencies in the Yellow Pages, newspaper, or the Internet).
• When you find a company you’re interested in working for, get the name of the department head or personnel recruiter for your desired job area and submit your resume to that person (you don’t have to wait for a company to advertise).
• Check listings in the local newspapers, trade and professional papers and journals (you will find many of these in your local library).
• The Internet provides a variety of web pages dedicated to helping you with job searches (you can access the Internet at your local library).
• You may want to visit the library for additional information:
  
  Miami-Dade Public Library (Main Branch)
  101 West Flagler Street, Miami, FL
  (305) 375-2665

• Books to help you write your resume
• Literature on changing careers
• Information on educational training opportunities, including college and trade school catalogs
• Employment opportunities in other states and other countries
• Materials on test preparation, including employment tests, college entrance tests and career aptitude tests
• Microcomputers for public use
• Information on careers
• Information on job trends
• Internet access to educational and employment information

1. Talk to your family about the situation.
   Let family members know what decisions must be made. Talk about what is important and what is not so important.
   
   
2. File for unemployment benefits.
   Take your social security card to the unemployment office nearest your home as soon as possible. They will help you file your claim. If there is a waiting period between the time you apply for unemployment benefits and the time your check begins, you may be eligible for public assistance. Also, if you are not eligible for unemployment benefits or if your unemployment benefits run out before you find another job, you may be able to get public assistance.
   
   
3. Evaluate the ways your family uses money.
   Many times people buy things, not because they need the things, but because they want to spend money. Now is the time to tighten the purse strings and eliminate needless spending.
   
   
4. Take a financial inventory.
   Look at what your family now owns. A few minutes spent calculating your family’s net worth just might boost your spirits. Add up the total value of all your belongings and subtract from that total the amount you owe. Remember to figure the value of everything at today’s market prices, not the price you paid for it. In other words, how much could you sell it for?
   
   
5. Find ways you can cut corners.
   To do this, you must know exactly how much money you have coming in and going out each month. Estimate what you spend on food, clothes, school, gifts, and other expenses.
   
   
6. Talk to the people you owe money to.
   Don’t ignore bills or you may lose what you already have. Immediately contact your creditors: the finance company, bank, credit union, and department stores. Make an appointment to explain your situation. You may be able to refinance your loan, or make another contract for smaller payments over a longer period of time. You may consider a consolidation loan. Try and work out a way to handle your monthly mortgage payments. If they are too high for you to pay, go to your lender and explain. Perhaps you can pay only the interest for a certain period of time. Or, they may permit you to postpone one or two payments until you have pulled yourself out of your financial crisis. The most important thing is that you talk with your creditors.
   
   
7. Examine your health insurance policies.
   Chances are you were insured under your former employer’s group health plan. If you were, the Comprehensive Omnibus Budget Resolution Act (COBRA) of 1985 provides you the opportunity to continue group health insurance for up to 18 months after you have been laid off. You will need to apply for this and pay the premiums. However, you have 18 months to find a new carrier.
   
   
8. Think about your cash on hand.
   You may need to decide whether to withdraw some of your savings or to take out a loan. What you decide will depend on your individual circumstances.
   
   
9. If you find you need outside help, turn to social agencies.
   Several programs, such as Food Stamps and Medicaid, are available for families needing financial aid. Contact the Department of Children and Families’ Food Stamp Office to find out if you are eligible. Your family’s resources and income determine eligibility. When you apply for the Food Stamp Program, take with you your rent receipts or housing payment book, utility bills, proof of medical bills (doctor, hospital, etc.), and proof of income for all working members of your household, including all benefits such as Social Security and public assistance, bank books, or any papers showing what you have in savings.

• Unemployment claim filing
• Employment training
• Job placement
• Job searches
• Welfare transition and welfare-to-work assistance
• Career counseling
• Social service referrals

• Jackson Memorial Hospital is the county hospital. It provides medical treatment and emergency care to all patients regardless of their availability to pay or if they have health insurance. Fees are determined based on income. Call (305) 585-1111 for more information.

• Miami-Dade County Public Health Department provides a wide range of medical testing and screening for disease, free immunizations, and free well-child care and evening neighborhood clinics. Call (305) 324-2400 for information about the office nearest you.

• Save 50% on your groceries through SHARE, a Florida Food Network. Call Toll Free 1-800-536-3379 or visit www.shareflorida.com for more information.
• Contact the Human Services Coalition to see if you qualify for benefits like Food Stamps, Florida Kid Care or Federal Earned Income Tax Credit. Call the access hotline at (305) 576-5001.
• To call specifically for Food Stamps information, call the Florida State Information Hotline number at 1-866-762-2237.
• One of the best sources of information on patient assistance programs and other programs that help people obtain health supplies and equipment is NeedyMeds One. Visit www.needymeds.com for more information.
• Partner for Prescription Assistance brings together America’s pharmaceutical companies, doctors, other health care providers, patient advocacy organizations and community groups to help qualifying patients who lack prescription coverage get the medicines they need through the public or private program that’s right for them. It’s a free service. Go to www.pparx.org to visit their website.
• RxAssist offers a comprehensive database of patient assistance programs, as well as practical tools, news, and articles so that health care professionals and patients can find the information they need. Visit www.rxassist.org for more information.
• DestinationRx.com is a free online membership service providing consumers with the necessary information and savings services to help them save money on their prescription and drug store item purchases. Visit www.destinationrx.com.
• BenefitsCheckUp is the National Council on Aging site that helps thousands of people every day to connect to government programs that can help them pay for prescription drugs, health care, utilities and other needs. Visit www.benefitscheckup.org for more information.
• Visit www.druginfonet.com/index.php to simplify a search for healthcare information with links to other healthcare sites on the Internet.
• FDA’s website provides timely consumer information on generic drugs. Visit www.fda.gov/cder/ob/default.htm for more information.
• Social Security’s website locates financial assistance in paying for prescription medication. Go to www.ssa.gov/prescriptionhelp for more information.
• Medicare Prescription Drug Plan Finder has the tool to get general Medicare Part D drug plan information, find plans available in your area, and detailed cost information on current prescription drugs. Visit www.medicare.gov for more information.
• For prescription prices by county visit http://www.flseniors.net/prescriptiondrugs.
  
  Food Stamps: The Department of Children and Families
  
  Phone: 1-866-762-2237
  Website: http://www.myflorida.com/accessflorida/
  
  Applying For Benefits
  You can apply for assistance using just your name, address, and a signature although providing more information on your application, will help determine your eligibility more quickly.
  
  Processing Your Application
  It may take 7 to 30 days to process your food stamp application. Expedited households may receive food stamp benefits within seven days. Your answers on the application will determine if your household meets expedited food stamp criteria. Applications for Medicaid and Temporary Cash Assistance may take 30 to 45 days, and Medicaid applications may take longer if we need to determine if someone is disabled. You may check the status of your application by visiting our ACCESS Florida website at http://www.myflorida.com/accessflorida and click on the "Check the Status of your Application" link
  
  

• Maintain as normal a schedule as possible, but don’t overdo it; cut out unnecessary “busyness” and don’t take on new projects.
• Allow time for activities that make you happy.
• Acknowledge that you may be operating below your normal level for a while.
• Structure your time even more carefully than usual – it’s normal to forget things when you’re under stress.
• Keep lists and double-check any important work.
• Maintain control where you can – make small decisions even if you feel like the issue is unimportant, or you don’t care (it is important to maintain control in some areas of your life).
• Spend time with others, even though it may be difficult at first – it’s easy to withdraw when you’re hurt, but now you need the company of others.
• Establish support systems: family, friends, places of worship, school, coworkers, etc.
• Be aware that children are often unable to express their thoughts or feelings verbally; often they will act them out.
• Let your children know that you are there to listen if they want to talk – be honest with them about your own thoughts and feelings.
• Avoid self-prescribed medication and addictive substances like drugs, alcohol, caffeine, and nicotine – controlled substances may reduce the perception of stress, but they do not minimize anxiety.
• Find help; if you feel as though you are alone and no one can help, don’t let your feelings of panic, anger, and loneliness build.
• Recognize and deal with your stress – counseling or a support group can help.
• Give yourself time – you may feel better for a while, then have a “relapse.” This is normal; allow plenty of time to adjust to the new realities you must face.