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Avoid foreclosure: seek help, help yourself

By April Sorrow
University of Georgia

In Georgia, foreclosure sales occur the second Tuesday of each month at most county courthouses. You could lose your home if you are three or four months behind on its payments. To avoid this, work with your lender and look to change spending habits.

“Most importantly, be realistic. If you are experiencing problems making your house payments then you will have to make some sacrifices to keep your home,” said Pamela Turner, a housing specialist with University of Georgia Cooperative Extension.

Many people at risk of foreclosure are those experiencing problems due to job layoffs and increased food and fuel prices. Regardless of the reasons, Turner said, you first must admit a financial problem exists.

“After you have admitted to yourself and your family that there is a problem, you need to identify the cause and evaluate your options,” she said.

Reading your mail and talking with the lender are important first steps. It is best to work with the mortgage servicer in the first 90 days of delinquency.

“Banks don’t want to foreclose on your property, they lose when they have an empty house to sell,” Turner said.

It is critical to know how much you earn and spend. “Developing a spending plan is a great way to get control over your income,” Turner said.

If you are already behind on your house payments, then you need to develop a priority budget. Food and shelter are always your top priorities.

“No matter which bill collector calls the most or screams the loudest, pay your mortgage first,” Turner said.

After you have paid for your food and shelter, consider transportation to work. If possible, use public transportation or car pool. House and car insurance are areas where people at times try to cut. But if you are paying for a house or car, you must carry insurance for them. Check with your lender to see how much coverage is required.

Home utilities are necessary. Keep payments current. It often costs more to get them turned back on if they are turned off due to lapsed payment.

Your debtors are next on the list.

“You have a legal obligation to pay these bills, but in a financial crisis they can be set aside for a brief time while you maintain your shelter and feed your family,” she said.

Beware of scams.

“If someone leaves a flier on your door or staples a notice to the utility pole saying they can help you for only $1,000 down, don’t believe them. Anything that sounds too good to be true is almost always a scam,” Turner said.

To prepare yourself for the unknown, make a working spending plan, and try to have enough in savings to cover your living expenses for at least three months.

Look around the community to see what resources are available. There are different services. Most have limited resources and are based on financial need. Take advantage of foreclosure-prevention counseling offered by government agencies, nonprofit groups or your lender.

The majority of loans in default now are not federally insured loans. But the U.S. Department of Housing and Urban Development has programs to help those at risk of losing their homes.

Some federal programs available to Georgians are FHASecure and HOPE for Homeowners. A home-loan-guaranty program is available through the Federal Deposit Insurance Corp. A loan-modification program by Fannie Mae and Freddie Mac offers a fast-track for mortgage relief. You don’t need to be in mortgage default to qualify for help. More information is available at www.hud.gov.

(April Sorrow is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.)

(April R. Sorrow is a science writer with the University of Georgia Public Affairs Office.)

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