Common Foreclosure Myths
MYTH: My mortgage company would rather foreclose on my home than keep me in it.
This is not true; when foreclosure occurs, there is a loss to the homeowner, the community and to the mortgage company. A mortgage company sustains an average loss of about $58,000 when foreclosure occurs (TowerGroup study). Mortgage companies are in the business of providing mortgages - not owning or selling homes - and would always prefer to keep you in your home.
MYTH: Foreclosure is an uncommon problem. I’m all alone in this.
Foreclosure is a challenge faced by millions of Americans every year from all walks of life. Rich, poor, young, old - the list is as diverse as society itself. No matter your situation, the Hotline process allows dedicated counselors to focus on callers who require specialized attention. The Homeowner’s HOPE™ Hotline receives about 1.9 million calls each year from distressed homeowners facing foreclosure and has provided counseling to more than 820,000 homeowners.
MYTH: I’ve only missed one payment. I’m sure I can catch up.
The most important thing to remember when playing catch-up with your mortgage is that you owe any delinquent payments plus the current month's payment. So, if you're a month behind, you actually owe two payments - last month's and this month's. By calling 888-995-HOPE right away, even before you've missed a payment, you will have more options available to you.
MYTH: I’ve missed too many payments to get help.
There's always time to get help. We can't work miracles, but we can always give expert advice for any situation. That being said, the help we're able to offer is far more constrained if you're eight payments behind than if you're one or two behind. Calls are answered on average within 30 seconds by live operators and the sooner we can get involved, the better chance you have of avoiding foreclosure.
MYTH: I’m getting many offers of “help” from a variety of different people. Are they all scams?
Because of the public nature of foreclosures, anyone is able to access foreclosure listings on a daily basis. These include the owner's name and address, at the very least, and in some states, they could include other sensitive information. Armed with this data, scammers can take advantage of a desperate homeowner.
The Homeowner’s HOPE™ Hotline is a central point of contact for homeowners who think they may be a victim of a scam. If you believe you are the victim of a scam, or you know someone who is, please help us prevent scams by calling the Homeowner’s HOPE™ Hotline at 1-888-995HOPE™.
Here are some of the warning signs for potential foreclosure scams:
- If your home's ownership changes hands. A common scam is one where an individual or party buys your home, then lets you rent it back. It sounds good at first, but you're losing your property and your new landlord can now legally kick you out of your home with little to no notice.
- You're asked to pay something up front and/or you're asked to stop making mortgage payments. Usually, these scams involve paying large sums of money to some sort of "foreclosure prevention service." These services offer to do what our counselors do: provide counseling, create a budget and approach the mortgage company to consider a payment plan. But the services don't do always do this work thoroughly, or follow through at all. The most important thing to remember when it comes to any foreclosure service is that foreclosure advice and direction should always be free.
- You're under pressure to act immediately. Some scammers will prey on the stress and anxiety that surrounds the foreclosure process by convincing owners to sign things that they don't understand. Don't sign anything without either first talking to an attorney, your mortgage company or a nonprofit foreclosure prevention organization, like the Homeownership Preservation Foundation.
HPF is working with NeighborWorks America, HUD, Fannie Mae, the Department of the Treasury and the Lawyers Committee for Civil Rights Under Law to curb foreclosure rescue scams. As a result, HPF has seen an increase in calls to report being the victim of a scam. HPF has set up a dedicated team of counselors trained specifically to take information on reported scams and work with you to address any resolved financial pressure.
MYTH: It’s impossible to stay in my house after foreclosure proceedings begin.
Counselors help you to prioritize your mortgage obligations and manage your total debt by focusing on preserving homeownership stake whenever possible. When preserving your home is not possible, the counselor is able to provide information regarding your options, including information about short sales and deeds-in-lieu.
Contrary to what you might think, there are still options available to you after the foreclosure process has started. The sooner you call us, the more tools we'll have to help you take action to improve or change your situation.
