Prioritize All Your Debt
For most families, your home is your most valuable asset. As such, protecting that asset should be a top priority. Our parents or grandparents’ generations did not carry the amount of debt many consumers feel comfortable accumulating today. Between home loans, multiple credit cards, auto loans, and student loans, just to name a few, we can sometimes get ourselves overextended. With a high level of debt, sometimes only a minor personal crisis can leave us unable to pay mounting bills. Thus it is important to strive to carry only a debt level you know you are capable of timely and reasonably repaying. Exciting offers of buy-now, pay-later and initial low-interest-rate credit cards that increase greatly after the introductory period can lure consumers into purchases that are truly not within their budget. Meeting with a non-profit credit counselor or financial planner could help you to determine a realistic debt level that will work for you.

Ask For Payment Assistance
If your debt is beginning to mount, contact the companies and service providers to whom you pay your bills and obligations. Ask them for payment assistance, perhaps in the form of temporary payment suspensions or reductions in the amount of your monthly payments. Many utility companies have hardship assistance and related programs. As part of the prioritization process, it is also helpful to reduce your overall household spending and use redirected funds towards payment of your mortgage and other high priority debts.

Beware of Foreclosure “Rescue” Scams
Unfortunately, scam artists commonly prey on the most vulnerable people who are willing to consider nearly any option to keep from losing their home. Be wary as you pursue ways to avoid foreclosures. For example:

• Make sure that credit counselors work for a HUD-approved organization.
• Beware of anyone who offers to buy your home and “help” you buy it back later.
• Carefully review any offers that require you to pay a fee for counseling and other help.
• Don’t sell your home without first talking to your lender.

Nonprofit Assistance is Available
If you are concerned about calling your lender, contact the national assistance hotline: 1-888-995-HOPE (888-995-4673). In addition to your lender, trained phone counselors affiliated with the nonprofit Homeownership Preservation Foundation Credit Counseling Resource Center can help you devise a plan to overcome difficulties and possibly avoid foreclosure. The assistance is provided at no cost or obligation to the caller. Again, the sooner you call, the more options you will likely have at your disposal.

Lenders Understand and Want to Help
These challenges are not new to lenders. They’ve likely helped others, in situations just like yours, partially and even fully recover from unexpected hardships and get their finances back on track. Lenders generally do not benefit if a home goes into foreclosure. If a foreclosure situation arises and a lender must foreclose, it’s not an easy task. Foreclosure can be a complex process. On top of that, state and local laws which lenders must strictly follow can vary widely, which can further complicate matters. They’re required to go through legal channels, take possession of the home, often make repairs if needed, put the home on the market, and successfully sell it. Because of the extensive costs and efforts associated with all these activities, foreclosures are usually considered a “last resort” for lenders. That’s why it’s so important to educate yourself. Take the time to learn what you need to know. The more you know, the better prepared you’ll be to find the right solution for your financial challenge.