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Tips to prevent foreclosure

After moving into your new house, review your loan documents, such as the Deed of Trust and note. Familiarize yourself with how payments are credited and what your rights or responsibilities are if you miss mortgage payments. Make note of the loan servicer and when the monthly payment is due.

A mortgage payment is a major monthly expense. Carefully evaluate your financial situation and create a budget.

Track where your money goes. Focus on spending less than you earn every month. Establish an emergency fund to cover monthly expenses, such as mortgage payments, if you are out of work or experience a loss of income.

​​Your house may be subject to foreclosure for not paying property taxes. In Oregon, property taxes are due Nov. 15 each year. Taxes can be paid in three installments: Nov. 15, Feb. 15, and May 15.

Sometimes, property taxes are collected by your mortgage servicer as part of your monthly payment. It is set aside in an escrow account on your behalf, and paid by the servicer when it is due. If the servicer does not escrow your taxes, you must be prepared to make the tax payments when they are due. Set aside money each month to prepare to make property tax payments. If you are not sure who is paying the taxes, contact the county where your house is located to find out if you or the servicer pays the property taxes.


A lien is a legal right or claim against a property by a creditor. This gives the creditor access to the property if debts are not paid. If you decide to refinance or sell the property, the lien will be satisfied out of the proceeds before you receive any money.

A mortgage is the most common lien on your house. You pay off the debt over time, or from the proceeds when the home is sold. That satisfies the lien. If you do not pay your property taxes, the municipal government has the right to place a lien on the property. A lien holder has the right to seize and sell the property to satisfy the lien, so it is important to keep your home free of unnecessary liens.

The loan servicer must send you notice before your loan is sold, transferred, or assigned to another company. None of the original terms and conditions of your loan can be changed, but the company you send the mortgage payments to will change. Stay on top of this transfer or sale so payments are made to the correct servicer. Do not throw away any mail without reading it first because it may be from your new loan servicer.

If you see an error in your statement or incorrect information about the servicing of your loan, send a written request – preferably by certified mail – to the address provided. Describe the specific errors or discrepancies. Follow up with phone calls; keep a log of all communication. Get the lender’s response in writing. Continue making your regular payments during this time.

If you are struggling to make loan payments – Assess the situation

If you get behind on your mortgage payments, you may be able to keep your home and reduce the negative effect on your credit rating. It is important to confront the problem early. The most common mistake is to ignore the problem or delay taking action. If the goal is to save your house and credit rating, immediately contact your servicer and try to negotiate a solution.

If your financial situation will be resolved in the short-term, work with the servicer or a housing counselor to set up a plan for mortgage reinstatement, forbearance, or a repayment plan. Explain your willingness to commit to a payment plan until you are in a better position to resume your regular payments.

Mortgage reinstatement
If you have enough cash (examples would include a work bonus, tax refund, or settlement payout), you can reinstate your mortgage by making up all the missed payments, plus fees and interest, in one lump sum.

A forbearance is a temporary period of time during which a regular monthly mortgage payment is reduced or suspended. You will need to show that your situation will be improving soon, and that you will be able to catch up using an agreed-upon repayment plan.

Repayment Plan
You promise to pay down past due amounts on a mortgage while continuing to make regular monthly payments on a property. This is often tied to a forbearance plan.

If you foresee long-term or permanent problems beyond your control, such as the loss of a job, medical emergency, or divorce, speak with the loan servicer about a loss-mitigation plan.

For more information, check out Keeping Your Home, a publication from the Oregon Division of Financial Regulation

For free help, contact an Oregon certified housing counselor.