Tips to avoid foreclosure on your house

July 31, 2021, is the day that the federal government is lifting the foreclosure moratorium that was enacted due to COVID-19.

That means for those who haven’t paid their mortgages during COVID because of economic reasons, the requirement to pay the mortgage is re-instated.

Most of those who took advantage of the moratorium have been communicating with their lenders and are well aware of what payments are due when.

For others, it’s possible the economic effects of COVID coupled with the emotional toll this last year has allowed people to get behind paying bills, including their mortgage, and they haven’t really addressed the situation yet.

The foreclosure process is relatively quick, allowing a lender who hasn’t received payment for a loan for four months to begin the legal work to take the house.

That is why our first piece of advice for those who haven’t paid or are struggling to pay their mortgage is to contact their lender immediately and talk to them about options. If that feels too intimidating, or people want some support doing that, please give us a call at NeighborWorks.

Our HUD-certified housing counselor Julie Galligan can be reached at (360) 533-7828. For no fee, she can help individuals or families figure out their finances and work with them to save their homes. Julie also passed along some advice that can be found at the U.S. Department of Housing and Urban Development’s website.

Tips for Avoiding Foreclosure:

The HUD’s website lists many helpful tips for people having trouble keeping up with mortgage payments:

• If you’ve received a notice from your lender, don’t ignore it!

• Contact your lender immediately.

• Contact a HUD-approved housing counseling agency. (Call (800) 569-4287.) Or call NeighborWorks of Grays Harbor in Aberdeen at (360) 533-7828.

• For up-to-date information on this issue, you can check out the Consumer Financial Protection Bureau (CFPB). It includes extensive consumer resources online at www.consumerfinance.gov/housing.

If you are unable to make your mortgage payment, HUD’s website offers the following excellent advice:

1. Don’t ignore the problem. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem. Lenders do not want your house. And, they have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender. The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights. Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state by contacting the state Government Housing Office. (Or you can call us at NeighborWorks for that information.)

5. Understand foreclosure prevention options. Valuable information about foreclosure prevention (also called loss mitigation) options can be found online (/topics/avoiding_foreclosure).

6. Contact a HUD-approved housing counselor. (NeighborWorks has Julie Galligan at (360) 533-7828. For other options call (800) 569-4287.

7. Prioritize your spending. After healthcare, keeping your house should be your first financial priority. Review your finances to see where you can cut spending to make your mortgage payment.

8. Use your assets. Do you have assets – a second car, jewelry, a whole life insurance policy – that you can sell for money to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if this doesn’t bring enough cash to significantly affect your mortgage payments, lenders note your willingness to make sacrifices to keep your home.