RealtyTrac®, the leading online marketplace for foreclosure properties, reported over 3.1 million U.S. foreclosure filings in 2008, an 81 percent increase from 2007 and a 225 percent increase from 2006. Ohio ranked seventh among 50 states and Dayton ranked 34th among 100 cities in 2008 foreclosure filings.
"Homeowners in threat of foreclosure are scared and many don’t know what to do," said John North, BBB president and CEO. "They avoid lender phone calls and notifications because they’re embarrassed and believe ignoring calls and notifications gives them time to get caught up on mortgage payments. In reality, they’re giving lenders no choice but to begin the foreclosure process."
According to the U.S. Department of Housing and Urban Development (HUD), here’s a general timeline of the foreclosure process:
First month missed payment:Your lender contacts you by letter or phone.
Second month missed payment:Your lender calls to discuss reasons payments haven’t been made.
Third month missed payment:You’re notified in writing of delinquency and required to bring mortgage current in 30 days. If you don’t pay the specified amount or make arrangements by the given date, the lender may begin foreclosure proceedings.
Fourth month missed payment:If full payment or an arrangement hasn’t been made, you’re referred to your lender’s attorneys, incurring all attorney fees.
Sheriff’s or public trustee’s sale:The attorney schedules a sale or foreclosure. You may be notified of the date by mail and you have until the sale date to make arrangements with your lender or pay the total amount owed, including attorney fees.
If you’re struggling to make mortgage payments or anticipating falling behind, the most important thing to do is act immediately. The further behind you get, the fewer options are available. Chances are your lender wants to avoid foreclosure as much as you do. Foreclosure is expensive for lenders, so many would rather workout options to help you keep your home, such as a repayment plan; mortgage modification (restructuring of loan terms); partial claim; or deed-in-lieu (voluntarily giving back the home). There are requirements to qualify for these options and many only work if your loan is one or two payments behind.
To contact your lender, check your monthly mortgage billing statement, coupon book or the lender’s Web site for a customer service or loss mitigation number. Explain your situation and be prepared to provide your loan account number and financial information, such as monthly income and expenses. Your lender may send paperwork to be completed and returned and will review it to determine the best solution. Keep in mind this process may not be quick, but don’t lose time by procrastinating. Responding to requests quickly will improve your chances of working out a resolution. And, while there’s no guarantee relief will be given, most lenders are willing to explore every possible option.
If you’re unable to talk with your lender, free or low-cost housing counselors are available through HUD or credit counseling agencies. In 2006, 2007 and 2008, HomeOwnership Center of Greater Dayton, a HUD-approved housing counseling agency and BBB Accredited Business, assisted 170, 486 and 967 homeowners, respectively. The organization provides free counseling whether you’re in threat of getting or already behind on your mortgage, regardless of income. Counselors will assess your financial situation and determine what options are available.
"The biggest causes of foreclosures have been predatory lending and inappropriate mortgages," said Jackie Easter, homeownership specialist. "Last year, 54 percent of the cases were the result of income loss. HomeOwnership Center wants to help homeowners before they enter into foreclosure or legal action. Once a person is in foreclosure, they’re facing $2,000 - $3,000 in legal fees. We also provide grants and loans, if approved, people can use to get current on their mortgages. In 2008, we provided $150,000 in rescue loans and grants," Jackie added.
Consumer Credit Counseling Service (CCCS), a BBB Accredited credit and debt counseling service, is also a HUD-approved counseling agency offering foreclosure prevention assistance to those struggling to make mortgage payments. The organization encourages homeowners to take steps to avoid problems. CCCS advises struggling homeowners to prioritize bills and make every attempt to pay mortgages and stay in their homes; don’t avoid lenders, stay in contact with them and make sure they understand homeowners’ situations; and contact reputable housing counselors to explain options and available resources.
Melodee Sheils, director, says "We’re also finding in this economic climate that lenders/servicers are, for the most part, more willing to work with the delinquent borrower. Don’t wait too long to address your problems and get counseling if necessary. Our biggest problem is people wait too long to get counseling and then they are too delinquent on their mortgage and their only option is not to keep the house."
Together with ReMax Victory realtor®, Eugene Pridgett, Jason Ortiz, owner of JC & Associates, a BBB Accredited Business specializing in lender negotiations on behalf of homeowners, provides pre-foreclosure guidance, recommendations and solutions for troubled homeowners. They help homeowners by providing accurate and timely information enabling homeowners to make better decisions. As a result, a proper course of action can be selected that best positions the homeowner to resolve the situation. Each case is as unique as the property; one size does not fit all.
"We are interested in making people aware of the solutions available to them," Jason said. "And, often homeowners are not aware of available solutions and options. They may choose an option like bankruptcy when it may not be the best solution for reasons they are completely unaware of. If appropriate, JC & Associates may offer to invest in the home to help the homeowner avoid foreclosure or Eugene will market the property as a short sale and sell to a confirmed buyer."
As you look for help, be aware there are two primary sources of assistance available to homeowners in threat of foreclosure: 1) nonprofit organizations providing free or low-cost counseling and guidance and 2) for-profit businesses charging fees to negotiate solutions for homeowners and guiding them through the process. Your Better Business Bureau recommends you research and select trustworthy companies to do business with.
Foreclosure scams can cost you your equity and/or home, so be careful. A common ploy used by con artists is they claim to pay off your mortgage, but you discover the initial mortgage hasn’t been paid and the deed was never transferred, resulting in you facing eviction and still owing the original loan amount. Another scam occurs when, for an upfront fee, the con artist guarantees to renegotiate your mortgage terms and stop the foreclosure process or your money back. You may pay thousands of dollars for the company to do nothing, losing your home and money. These scams illustrate why it’s important to do your homework.
To help avoid foreclosure scams, read everything before signing and get all promises in writing. Beware if someone tells you not to contact your mortgage company or attorney. Never sign away ownership of your property or a contract under pressure. Ask a trusted family member, attorney or financial professional to review paperwork you’re asked to sign. You should also evaluate unsolicited offers from companies implying help is available to ensure they’re from trustworthy businesses. Legitimate for-profit companies provide fee-for-service solution assistance nonprofit organizations often don’t have capabilities or resources to provide, including abilities to purchase your home "as-is". Consider your situation, weigh your options by seeking trustworthy assistance and take action.
It’s important to Start With Trust by contacting your Better Business Bureau. It can provide reliability reports on businesses and more information on foreclosure prevention and negotiation services. Visit www.bbb.org or call (937) 222-5825 or (800) 776-5301.
About Consumer Credit Counseling Service of the Miami Valley
Consumer Credit Counseling Service (CCCS) is a local, not-for-profit credit counseling agency, providing support, knowledge and tools needed to make informed financial decisions.
3131 S. Dixie Dr., Ste. 300, Moraine, (937) 643-2227
About HomeOwnership Center of Greater Dayton
HomeOwnership Center of Greater Dayton offers a variety of free and low-cost services to help Dayton, Ohio-area residents achieve and sustain homeownership.
205 E. First St., Dayton, (937) 853-1600
About JC & Associates
JC & Associates is a professional real estate solutions provider specializing in homeowner foreclosure prevention, assistance and loss mitigation services, including negotiating lender and lien holder workout options (e.g. loan modifications, forbearance agreements, lien releases and short sales).
3195 Dayton Xenia Rd., #900-190, Dayton, (937) 912-5830
About Your BBB Serving Dayton and the Miami Valley
Your BBB is an unbiased nonprofit organization that sets and upholds high standards for fair and honest business behavior. Businesses earning BBB Accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. Your BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM and educational information on topics affecting marketplace trust. To further promote trust, your BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 126 BBBs serve communities across the U.S. and Canada, evaluating and monitoring nearly 4 million local and national businesses and charities. Your BBB serving Dayton and the Miami Valley serves Montgomery, Greene, Clark, Darke, Miami, Preble, Shelby and northern Warren counties. Please visit www.bbb.org for more information about your BBB.