Early Steps to Prevent Foreclosure

You already know a Plan B is important, but what should it include? The first steps you can take to create your plan are by:

• Saving money
  Put away some money each month to have an emergency fund in case something unexpected happens, such as losing your job. You should have at least three months worth of housing and living costs saved to protect you from unexpected financial problems. If you don’t already have this much in your savings, it is a good idea to start paying yourself first to help increase your savings.

• Reducing expenses
  Think about where you can save money, For example, look at temporarily canceling cable or your gym membership. By paring down to the bare necessities, you may be able to save a significant amount of money. And, even if it doesn’t seem like enough of a savings to make a big difference, remember – every little bit helps.

Use our budget worksheet to help think about which changes you can make if you find yourself facing financial difficulties.

If you've put your Plan B into action and still find yourself having trouble paying the mortgage, you should:

• Call your lender!
  This is the single most important thing you can do. Lenders want borrowers, not properties – they would prefer to see you keep your home. They will be able to provide you with an option that best meets your needs.

• Be honest with your lender
  Different situations require different solutions. For example, your lender will need to know if your financial problems are temporary or more long term.

• Know what you owe
  Have a clear picture of what your debts are and make your mortgage the priority if you have to make choices. Debt collectors can be very aggressive, but if you can't pay all your debts, make sure your home is protected from foreclosure by paying your mortgage first.

• Talk to a non-profit housing counseling agency
  A non-profit housing counseling agency may be able to help you restructure your bills so that you have an easier time paying them. Additionally, they can help you create a budget that suits your specific needs. You can also call the HOPE National helpline at 888-995-HOPE. They are dedicated to helping homeowners facing foreclosure 24 hours every day. Spanish – speaking counselors are available.