By: Jay Ovalle. JayOvalle.wordpress.com

 I’ve had several calls from owners that are losing their home and wanting to know if there is a chance of selling their home before they are foreclosed. Most of the calls involve a situation where the owner is upside down. This means they couldn’t possibly sell their home, today, for anywhere near what they owe. These homes were purchased with zero or very little down. Since they can’t sell their home for the loan value, the only available option to this group besides foreclosure, is to sell their home for less than their mortgage and negotiate with the lender to take the loss. This is called a “short sale.” These owners will not be able to preserve their credit, but it would be less traumatic to their FICO score than a foreclosure. There is no help or sympathy at this point for investors and speculators. However, there are a lot of sad stories in this group too.

Some other calls are coming from owners who have experienced a temporary hardship that caused them to get behind on their payments. Some are just a couple of months behind while others are facing foreclosure or in foreclosure. These owners want to get caught up and stay in their home.

The good news is, if you are one of these owners, there is lots of help for you out there. The most important thing to do is contact your lender as soon as possible to explain your circumstances. Here in Arizona the process of foreclosure takes approximately six months. Normally, after you missed 3 payments, you get a 90-day notice of foreclosure which the lender has the option to stop or extend. That is why it is so important to contact them as soon as you realize you’re going to get behind.

Home Preservation Programs

There are a number of programs at the local and national level that will assist homeowners behind on their payments and who want to save their homes. Arizona, unfortunately, does not have a local program, but counseling can be obtained at:

Maricopa County Community Legal Services
305 S. 2nd Ave., Phoenix, AZ 85036-1538
Main: 602-258-3434
Toll Free: 1-800-852-9075 or Rescue Foreclosure: 602-682-3410

Association of Community Organizations for Reform Now
National Website: http://www.acorn.org
ACORN Housing Corp., 1018 W. Roosevelt St., Phoenix, AZ 85007
Phone: (602) 253-1111
Fax: (602) 258-7143 Contacts in the
Phoenix Office: http://www.acornhousing.org/index.ph

The Arizona Dept. of Financial Institutions also lists the HOPE Hotline (1-888-995-4673) at http://www.995hope.org/ to help with counseling and helping you deal with your lender.

A national program called PHASE (Preserving Homeownership And Savings Education Strategy) offers up to $5,000 grants to help homeowners behind on their payments. You won’t have to repay this money unless you sell the home while in the program or if your home is ultimately foreclosed. You will also have to pay taxes on these grants and will receive a 1099 at the end of the year. This program is a partnership between HSBC, Money Management International and HUD. (This last link will take you to HUD’s “Help for Homeowners Facing the Loss of Their Home” page. Excellent compilation of information and resources to get you started.)

Other links:

http://www.federalreserveeducation.org/pfed/foreclosure/

I amfacingforeclosure.com

http://loanworkout.org/

Ways to avoid being a victim of a foreclosure scam:

• Contact your lender immediately to implement a “work out” program or a plan, if you fall behind on your mortgage payment.
• Enlist the services of a government approved non-profit counseling agency or a reputable licensed real estate professional.
• DO NOT sign documents with blank spaces or blank documents.
• DO NOT sign any documents that you do not understand.