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If you have long-term or permanent financial problems, contact your mortgage servicer about a loss-mitigation plan. Prepare a letter explaining your situation, the reason you are facing financial problems, and why you think it could improve. If your servicer allows it, make partial payments and maintain your records. This may help you reach a permanent agreement with your mortgage servicer.
With this option, you request to change some of the original terms of the loan.
This may include extending the payments for a longer period of time, lowering
the interest rate, or converting to a fixed rate. This can help lower and
stabilize your mortgage payments.
You may have to complete a trial period before being permanently approved.
If approved, carefully review the documents to make sure you understand and
can meet the new terms.
If you are paying for private mortgage insurance, your loan insurer may consider
lending you money to pay the late payments and late fees. Contact your servicer
or insurer to ask if you qualify, and how it will be repaid. Federal
Housing Administration (FHA) and the Veterans
Administration (VA) have their own
guidelines for help under this option.
If you owe more than the appraised value of the house, the servicer may allow
you to sell it and accept an amount lower than what you owe. Short sales
are completed before the house is foreclosed.
Ask the servicer if there will be a deficiency judgment – the amount you owed
that is not covered by the sale of the house – filed against you for the difference.
Ask for a written agreement clarifying the status of any deficiency.
For homeowners 62 years old or older, another option may be a reverse mortgage.
The most common is the Home Equity Conversion Mortgage (HECM), administered
by the Federal Housing Administration. Seek counseling from a government-approved
housing counselor to decide if this is the right loan before talking to a
reverse mortgage lender.
Oregon law requires a person or company offering short sales and other foreclosure
avoidance solutions to be registered as a debt management services provider
or as a licensed loan originator. While licensed real estate brokers do not
need to be licensed as a debt management services provider to help homeowners
with short sale transactions, Oregon law restricts fees and commissions when
listing the house for sale.
Professionals and companies that offer to negotiate with servicers about possible
solutions are limited in how much they can charge for these services and must
meet other requirements. Learn
more about the debt manager requirements.
If you have exhausted all of the above options, you may give your house back
to the servicer by surrendering the title and avoiding foreclosure. Some
servicers may offer money to move out of the house, commonly known as cash
for keys. The servicer will expect you to leave the house in good condition.
Before you accept any money, ask for documentation about the conditions for
A loan modification, or the other options to avoid foreclosure, may have a
negative effect on your credit score. Speak with a housing
more info. Talk to a tax adviser if your servicer agrees to settle the debt
before foreclosure, or if the house is foreclosed upon, so you understand
the tax liabilities that may result from the settlement.
If you are struggling with your mortgage, you may receive information by mail
or telephone with promises of a quick-fix or easy solution to your mortgage
problem. Scammers will even create letters or advertisements that look like
they came from your mortgage company. If you receive a call, text, email, or
offer in the mail, call your mortgage company using the phone number on your
mortgage statement, and ask if the communication came from the mortgage company.
Visit the division’s foreclosure
scams page to learn more.
Discuss your options with a trusted family member or friend
Get free professional help from an Oregon certified
Contact DFR staff for help
Learn more about the Oregon
foreclosure avoidance program
Visit 995Hope to learn more about reverse mortgages
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