One of the most dreaded words that can come to the mind of a home owner: foreclosure. It’s a hard thing for us to talk about, because no one ever wants to lose their home and no one wants to have to take your house. Are you receiving notices from your lender asking you to contact them? Then the biggest advice we can give you is don’t ignore the letters from your lender. Below are some other helpful tips on avoiding foreclosure.
Don’t Ignore the Problem
One of the biggest problems that arise is when people ignore and don’t read the letters that they receive from their lenders. The further behind you become on your payments, the harder it is for you to reinstate your loan and potentially lose your house. Contact your lender when they send you letters as they have options to help borrowers through difficult financial times.
Know Your Mortgage Rights
Reading your loan documents when you sign should be a given, but there are some people that only skim or forget what they read as soon as they get the home. It’s good to find your documents again and read exactly what can happen if you can’t make your payments. Learning about foreclosure law and time frames that are in your tribe are state are crucial. Each tribe will have their own foreclosure procedures and if they aren’t enforced, the Department of Housing and Urban Development can stop making new loans within the tribe’s jurisdiction.
In the event of a foreclosure on tribal land, the land can go out of trust a non-natives can own it. With the unique status of trust lands, the tribe has the first right to refuse the property. This was established to protect the trust land from going out of trust. So, when a loan that is on the trust land starts to get delinquent, the bank or HUD gets in contact with the borrower to find out what is going on. They can also look at the housing wait list to see if there is anyone that could assume the mortgage, or the tribe can step in and take over the loan and put a different tribal member in the home. These protections make it so that the unique status of tribal trust lands is protected, and the last thing that 1st Tribal or HUD wants is having tribal lands go out of trust.
Talk To Lender or HUD Approved Counseling Agency
There are many different options that you can discuss with either your lender or a HUD approved housing counseling agency. HUD has either free or low cost counseling nationwide, and they are there to help you understand the laws and your options. They can even be mediators between you and your lender, as well as help you organize your finances. Some things that you will need to have on hand when you talk to them include:
- Loan number
- Reason for default
- Current income and expenses
- Is the loan in bankruptcy?
Prioritize Your Spending
Probably one of the most important but hardest aspects of avoiding foreclosure is reviewing your finances and seeing where you can cut spending. Are there extra expenses that can be cut such as TV, memberships, and other entertainment? It’s crucial in determining how your lender can work with you to create the best plan on repayment but still leaving you able to pay your other living expenses. Some expenses to include when going over your spending report should be: auto payments, charge accounts, medical/auto insurance, health insurance, utilities, food, daycare, student loans, and more.
Don’t Fall For Scams
You shouldn’t have to be paying fees for foreclosure prevent help, instead that money should be used to pay off your actual mortgage. There are many for profit companies that will contact you to ‘promise’ negotiations with your lender or even claim they can ‘stop your foreclosure immediately’. While they might actually be legit, most are not and will either charge you a large fee or scam you out of your money. A good thing to remember is to never sign any legal documents without reading and fully understanding them, and if you need to, get advice from an attorney, real estate professional, or HUD approved housing counselor or lender like 1st Tribal Lending.
As always, if you have any questions on what was covered in the article, or if you need further explanation on some tips to avoid foreclosure, feel free to contact us here at 1st Tribal Lending. You can leave a comment below or call us at (866) 235-4033.