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• When foreclosure begins it's a legal process, which is hard to resolve without some financial or credit damage. So don't ignore early warning signs.

1. If you are unable to pay other monthly bills, barely making minimum payments on your credit cards or relying on credit to pay for day to day expenses, this may soon lead to defaulting mortgage payments and open doors for foreclosure.Freddie Mac: Tips and Resources for Borrowers (June 2008)
2. Once you miss a payment, or two, the risk of foreclosure becomes real.
   • For every missed payment your credit scores goes down and you're hit by late fees. Unless you become current in your payments within three to five months, in most cases, the lenders legally initiate the foreclosure process.CNNmoney.com: How to avoid Foreclosures (July 2008)
3. According to the recent survey by Roper Public Affairs and Media, 86% of delinquent borrowers were contacted by the lender either by phone or letter.Roper Public Affairs and Media: Foreclosure Avoidance Research II (June 2008) While some homeowners remain in denial, others don't respond due to fear or embarrassment.
   • Open every letter you receive concerning your mortgage.

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If you notice any of the warning signs, contact or respond to the lender ASAP. The sooner you call the better your chances of negotiating a successful loan modification. Freddie Mac: Tips and Resources for Borrowers (June 2008) Even if you have money problems, don't be afraid.

1. Many borrowers believe calling lenders would trigger notifications to collection agencies and hasten foreclosure proceedings. But the converse is true. Federal Housing Administration:You Can Avoid Foreclosure and Keep Your Home
   • Lenders want to help homeowners because foreclosures are also expensive for lenders, investors and private mortgage insurance companies.
2. According to the Roper Public Affairs and Media survey, 57 percent of the nation's late-paying borrowers didn't know their lenders offered resources and alternatives to help them avoid foreclosures.Roper Public Affairs and Media: Foreclosure Avoidance Research II (June 2008)
   • These options work best when you are only two or three months behind in your payments.
3. You can find your lender's contact information on your monthly mortgage billing statement or payment coupon book.
4. The Federal Housing Administration recommends you have the following information ready when you call: Federal Housing Administration:You Can Avoid Foreclosure and Keep Your Home
   1. Your loan account number.
   2. A brief explanation of your circumstances.
   3. Recent income documents like pay stubs, Social Security benefit statements, tax returns, etc.

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• Once a lender declares your loan as in default, a foreclosure process may be initiated with the NOTICE OF INTENT TO FORECLOSE. Society for the Preservation of Continued Homeownership: Foreclosure First Aid Kit

1. Remember, a foreclosure notice does not necessarily mean you will loose your home. Society for the Preservation of Continued Homeownership: Foreclosure First Aid Kit
   • You may still have chance to renegotiate with the lender.
2. Foreclosure laws, procedures and homeowner rights differ from state to state.
   • For instance, in Pennsylvania the lender must send a notice of intent directly to the borrower, if the borrower is 60 days or more behind in his/her mortgage payments. Foreclosurelaw.org: Pennsylvania Foreclosure Law Summary In New Jersey, the foreclosure notice should be published in at least two local county newspapers. Foreclosurelaw.org: New Jersey Foreclosure Law Summary
3. Learn about the foreclosure laws and time frames in your state. Foreclosurelaw.org: Foreclosure Laws By State RealtyTrac.com: Foreclosure Laws and Procedures By State
4. You can also contact your local HUD office. U.S. Housing and Urban Development: Local HUD Information

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• Several governmental and not-for-profit organizations offer personal counseling services at no cost. A housing counselor will not only explain laws and procedures but also counsel you on available options to save your home and help you in settling loan modifications with your lender. U.S. Department of Housing and Urban Development: Tips for Avoiding Foreclosure

1. Check for the U.S. Department of Housing and Urban Development or a HUD approved counselor available in your area. U.S. Department of Housing and Urban Development: HUD Approved Housing Counseling Agencies
2. Hope Now, an alliance between counselors, lenders and investors, is another source for foreclosure counseling.HopeNow.Com: Front Page Alert
   • Call their hotline at 1.888.995.HOPE.
3. You can also contact legitimate not-for-profits like Neighbor Works, The Society for the Preservation of Continued Ownership (SPOCH) and ask for a counselor.Neighbor Works: Neighbor Works Society for the Preservation of Continued Ownership: SPOCH Home Page
4. For more information on foreclosure prevention resources available in your state, visit the HUD website. U.S. Department of Housing and Urban Development: Avoiding Foreclosure-Resources in Your State

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• The increase in foreclosures nationwide has opened doors for scams that promise to rescue homeowners from foreclosure. What these scams do is take your money, ruin your credit history and increase the risk of foreclosures. Office of the Comptroller of Currency: Consumer Advisory Press Release May 2008

1. In general, homeowners looking for foreclosure rescue should be wary of companies that offer help, but require a fee.HopeNow.Com:Front Page Alert
2. In the last year, the Better Business Bureau (BBB) has heard from victims of foreclosure rescue schemes in almost all 50 states. Better Business Bureau: Press Release August 2007
3. Furthermore, states with the highest foreclosure rates—such as Georgia, Colorado and Ohio—have an exceptionally high number of complaints for companies offering foreclosure rescue.
   • To lure homeowners, scam artists use simple slogans like "Stop Foreclosure Now!" or "We Can Save Your Home. Guaranteed. Free Consultation." Better Business Bureau: Foreclosure Rescue Scams
4. For those looking for foreclosure prevention help, the BBB advises to avoid any business that:Better Business Bureau: Foreclosure Rescue Scams
   1. Guarantees to stop the foreclosure process – no matter what your circumstances.
   2. Instructs you not to contact your lender, lawyer, or credit and housing counselors.
   3. Collects a fee before providing you with any services.
   4. Accepts payment only by cashier's check or wire transfer.
   5. Encourages you to lease your home, so you can buy it back over time.
   6. Tells you to make your mortgage payments directly to the business, rather than your lender.
   7. Tells you to transfer your property deed or title to the business.
5. If you think you were a victim to a foreclosure rescue scam contact your state Attorney General's Office.Better Business Bureau: Foreclosure Rescue Scams
   • To find contact information for your state's Attorney General, check out The National Association of Attorneys General.National Association of Attorneys General: The Attorneys General

• Home foreclosure can be personally and financially devastating. However, you can prevent foreclosure by being proactive and confronting the situation head-on. Contact the lender immediately and directly once you detect any problem paying your mortgage.Freddie Mac: Tips and Resources for Borrowers (June 2008) Look for governmental and NGO help for housing counseling and avoid foreclosure rescue companies who ask for a fee. U.S. Department of Housing and Urban Development: HUD Approved Housing Counseling Agencies Contact the State Attorney General's office if you sense any malpractice.Better Business Bureau: Foreclosure Rescue Scams