Florida Consumer E-Newsletter - May 2008
Charles H. Bronson
Commissioner
A Message from the Commissioner
Dear Friends:
Foreclosure not only has a disastrous effect on a family’s finances, but it also has implications for the entire community within. Unfortunately Florida leads the nation in foreclosure rates so far this year, and came in second in 2007. The top five counties in Florida for highest foreclosure rates are Osceola, Saint Lucie, Lee, Flagler, and Broward respectively. According to the Mortgage Bankers Association, one out of every two hundred homes will be foreclosed upon.
The possibility of losing your home due to foreclosure is a scary prospect. If you’re having trouble keeping up with your mortgage payments, it’s a good idea to speak to a certified professional to explore all your options as soon as possible. The longer you wait, the greater chance you have in losing your most valuable asset. We’ve compiled the following information to help you in the event your home goes into foreclosure.
Sincerely,
Here are some of the steps a homeowner can take when confronted with the possibility of foreclosure:
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Contact your lender or loan servicing department, explain your situation and find out how they handle late or missed payments.
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Open and respond to all mail from your lender. Additionally, keep a log of all conversations with the lender and the representatives. Something as simple as a spiral notebook, with date and time of the conversation, who you spoke with, etc. can help keep the information straight.
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Consider different avenues to increase your income, reduce expenses, and prioritizing of expenditures. Retaining your home should be your first priority. Think about ways to raise funds to pay for late or upcoming mortgage payments. This could include selling off an extra vehicle, boat, or other non-essential items.
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Avoid foreclosure prevention companies that charge fees, are aggressive in having you sign up to use their services or make guarantees of recovery.
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Contact the Homeownership Preservation Foundation at 1-888-995-HOPE or visit their website at www.995hope.org for additional information and foreclosure prevention assistance. Hope is available 24/7, and hotline counselors will conduct an initial screening, then refer you to a local HUD-approved nonprofit counseling organization where trained housing professionals will help you assess your financial situation while negotiating with your lender.
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Contact a HUD approved Housing Counseling Agency (If not already referred by the HOPE Hotline). These nonprofit organizations have extensive training in foreclosure intervention, providing their services at no or minimal charges. Generally, these agencies focus on owner occupied homes, not investor-owned properties. When speaking to a counselor, here’s what to expect: You will be asked to bring current financial information so the counselor can evaluate the cause of the default and the homeowner’s ability to re-pay the loan. The lender will want to know the default cause, if the situation is short term, such as a temporary loss of employment or a medical condition, or if it is long-term, all affecting the borrower’s ability to pay the loan. After collecting and evaluating financial information, the counselor will explore repayment options. This may include a forbearance (temporary hold on monthly payments), loan modification, or refinancing. The best solution for the homeowner as well as the bank may be a deed in lieu of foreclosure, a short sale, or a foreclosure. These options are explained so the homeowner is fully prepared and informed about events that will occur.
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There are various legal options to protect your rights, such as bankruptcy. To fully understand your rights and options, you should consult a licensed attorney. Many local bar organizations have lawyer referral programs, or you can contact the Florida Bar for a referral at 1-800-342-8011.
Beware of Scams
A fraudulent foreclosure assistance representative will make up anything to try to sell services that promise relief, then fail to deliver. Their goal is to make a quick profit through fees or mortgage payments they collect from you, but do not pass on to the lender. If you’re looking for foreclosure prevention help, avoid any business that:
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Guarantees to stop the foreclosure process – no matter what your circumstances.
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Instructs you not to contact your lender, lawyer, or credit or housing counselor.
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Collects a fee before providing you with any services.
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Accepts payment only by cashier’s check or wire transfer.
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Encourages you to lease your home so you can buy it back over time.
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Tells you to make your mortgage payments directly to them rather than your lender, or tells you to transfer your property deed or title to them.
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Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.
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Offers to fill out paperwork for you and pressures you into signing a legal document without reading and understanding all the terms or getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
Remember, we’re here for you. Our Consumer Hotline, calling within Florida 1-800-HELP-FLA (435-7352), outside of Florida 850-488-2221 or en Español 1-800-FL-AYUDA (352-9832), will answer any consumer related questions you may have or direct you to the best resource for assistance.
Additional Resources
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The links below are for your information only. The goal of the Division of Consumer Services is to provide additional information to consumers. The Florida Department of Agriculture and Consumer Services does not review or confirm these sites for accuracy.
U.S. Department of Housing (HUD)
HUD sponsors housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.
Homeownership Preservation Foundation
The foundation offers free foreclosure prevention counseling by expert counselors at HUD-approved agencies, and is available to any homeowner in America having trouble paying their mortgage: 24 hours a day/7 days a week.
Federal Trade Commission
Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help you save your home. Unfortunately, once most of these foreclosure fraudsters take your money, they leave you with your situation being worse than it was before contacting them.
