Options for Homeowners Faced with Mortgage Foreclosure
Call the Unemployment Information Center at 215-557-0822 for help if you are behind on your mortgage. Our housing counselors may be able to help you.
Foreclosure Prevention Programs
The following is a brief list of options that might be available to you to help save your home.
1. Home Affordable Modification Program
If you are having trouble with your mortgage you should contact a housing counseling agency like the Unemployment Information Center. They can help you apply for government programs and help you negotiate with your mortgage company. Many mortgages are being modified to reduce payments and pay off arrears. The federal Home Affordable Modification Program (HAMP) can be a way to get your mortgage company to modify your mortgage. reduce your interest rates and monthly payments. They can even reduce the amount that you owe on the mortgage in some cases.
2. MORTGAGE Foreclosure Diversion Program
Philadelphia residents can get help through the Foreclosure Diversion program of the Court of Common Pleas. Instituted to reduce foreclosures in 2008, the Diversion program requires mortgage companies to negotiate a resolution with a defaulting homeowner prior to a Sheriff Sale or the granting of a judgment against the homeowner. The homeowner must contact a non-profit housing counseling agency, like UIC, to begin negotiating an affordable resolution to the problem with the mortgage company.
3. LOSS MITIGATION FOR HUD OR FHA LOANS
This option is available if you have a FHA loan. Mortgage companies are required by HUD to consider you for the following options.
4. WORK OUTS WITH A CONVENTIONAL MORTGAGE COMPANY
If you are not eligible for HEMAP and you do not have a FHA Loan you may be able to make an agreement with your mortgage company to modify your mortgage or to allow you to cure your mortgage over time. Our housing counselors can also help you with negotiations with your mortgage company. The mortgage company has the power to stop the sheriff sale while it considers your situation.
5. UNDOING PREDATORY LOANS
Under certain circumstances you may be able to rescind or undo the mortgage on your home. If you think you have a high interest rate loan, that has high fees that you paid when you got the loan, or that has unfair terms that you did not ask for, or if your lender required you to borrow more than you asked for you may have a predatory loan. If you have a predatory loan an attorney may be able to sue the lender to stop the sheriff sale and to change the terms of the loan.
6. Housing RETENTION GRANT PROGRAMS
If you have most of the money you need to stop the sale of your home, but you do not have all of it, you may be able to get a small grant - usually $1,500.00 or less from one of several agencies around the city. Contact UIC at 215-557-0848 for a list of agencies. The grants are usually only available if they will, along with whatever other money you have available to you, resolve your problem.
In some cases a Chapter 13 bankruptcy can be used to help you save your home. A chapter 13 bankruptcy can be especially helpful where the default was the result of a temporary loss in income or where the mortgage is a predatory loan that can be reduced through litigation to a an amount that is affordable. In some rare cases a Chapter 7 bankruptcy can be helpful if your inability to make the mortgage payments is the result of large unsecured debts that you have been trying to pay. A bankruptcy is not a magic solution and will often fail unless you are represented by a competent attorney and unless you have the discipline and income to follow the financial plan. Sometimes a bankruptcy can make matters worse. Homeowners should be very careful when they select an attorney. Not all attorneys who hold themselves out as experts in bankruptcy have the ability, knowledge or willingness to take advantage of the provisions of the law that are available to help people save their homes.
Call the Unemployment Information Center, a HUD approved non-profit housing counseling agency, at
Unemployment Information Center, affiliated with the Philadelphia Unemployment Project, 112 N. Broad St. 11th Floor, Philadelphia, PA 19120, 215-558-0822, www.Philaup.org