Housing - Foreclosure Prevention

Auriton can provide you with new home owner education or assist you if you are having trouble with your mortgage loan. An accredited HUD certified financial counselor can work with you and your lender to explore all your options including debt management.

It's important to note that mortgage companies and banks do not want their customer's homes. If you are having difficulty making your payment, please call either your servicer to identify your options or Auriton to review your situation.

To receive information regarding frequently ask questions regarding Home Foreclosure - CLICK HERE

To learn more about the basic terms involved with your mortgage feel free to review our Mortgage Terms Glossary - CLICK HERE

Past Due on Your Loan Payments
There may be solutions you have never considered. Working together, you can get all of the facts and explore every option.

Want to Refinance
If you are considering refinancing, be sure you have all the facts before making a decision. A financial counselor can show you the pros and cons of mortgage refinancing in your situation, and may be able to refer you to a lender who can help.

Buying a New Home
The mortgage qualifying process is one of the most stressful financial events in the lives of many people. Auriton can refer you to lending agencies that understand your situation and will treat you with dignity while providing the best possible interest rates.

Check our mortgage charts and tools to see how much you should borrow, based on your income and debts.

First Time Home Buyers
Check out our mortgage charts and tools to see how much you can reasonably borrow for a total mortgage and what your monthly mortgage payment would be. All mortgage companies do not offer the same charges and interest rates. It is best to shop the market before committing to a lender.

If you have any questions or would like a list of recommended lenders, call 1-877-332-8700.

Preventing Foreclosure

How to Prevent Foreclosure
Homeowners are classified as delinquent when they fail to make a monthly mortgage payment. A lender recognizes different degrees of delinquency, according to the number of missed payments and the reasons given for the default.

A distressed delinquent is a homeowner who has reasonable excuses for the default, along with the ability and the desire to pay. The lender may request to work out a repayment plan with distressed delinquents and may recommend financial counseling.

A chronic delinquent is a homeowner who has no justifiable reason for missing loan payments and whose payments are habitually late. Usually, the homes of chronic delinquents end up in foreclosure.

Surviving a Financial Crisis
It is important for homeowners to understand that it is not a good idea to take on additional debt to repay old debts. Instead, a homeowner who is experiencing a financial crisis should identify and address the cause of that crisis.

First, the homeowner should determine whether the crisis is a temporary financial problem or a long-term difficulty. Making this distinction will help the homeowner decide on a strategy for dealing with the crisis and avoiding foreclosure.

Prioritizing Debts During a Crisis
For most homeowners, the loss of a house means not only the loss of shelter, but also the loss of many years of investment in the creation of home equity and a livable household environment. For that reason, making the monthly mortgage payment should be one of the highest financial priorities every month. Special attention should also be given to those creditors who can take quick action against the home, the utilities, the car or other commodities the household needs. The order of priority each household assigns to such payments will depend on the household's particular needs and characteristics. Homeowners should be aware that they do not necessarily have to assign a high priority to those creditors who persistently demand to receive their defaulted payment or otherwise apply pressure to the homeowner during the crisis period.

The following list is a useful guideline for prioritizing household debts.

HOUSEHOLD NECESSITIES
Household needs may include food, health expenses and other primary needs. These should be given high payment priority, but the household should also try to reduce these expenses as much as possible.

HOUSING-RELATED BILLS
Any payment associated with the home should be considered high priority, because the risk of not making these payments is the risk of losing the home. Home-related bills include the mortgage payment, fees for homeowner's insurance and maintenance for condominiums.

UTILITY SERVICE
The utilities are essential to daily life, so they are considered a payment priority. The homeowner who is in financial distress should ask about special discount programs that are available in most states. Homeowners may also be able to reduce their utility bills by paying on time and therefore avoiding late payment charges, changing the type of service they receive, reducing their usage of utilities in general and eliminating luxuries that are not vital, such as cable TV service.

CAR LOANS
If the car is needed to get to work, it should be a priority to pay the monthly car loan or lease. If the household owns more than one car, serious consideration should be given to eliminating one or more of the payments by selling a car that is not absolutely necessary. The homeowner may also consider selling the needed car in order to buy a used or less expensive vehicle. Use of the car should be reduced to save money on gasoline and car maintenance. Making car insurance payments should also be a high priority.

CHILD SUPPORT DEBTS
Child support payments may be considered a primary need, since child support is assigned for food, health and clothing. In some states, failing to pay child support is a criminal action punishable by a prison sentence.

INCOME TAX
Income tax returns must be filed even if the tax debt cannot be paid right away. Many states offer the option of setting up a payment plan for income tax debts.

STUDENT LOANS
The government provides a number of options for a consumer who cannot afford to pay off a student loan. However, it also has special powers to collect on these loans. The government can seize up to 10 percent of the wage of the debtor, without a court order and can charge up to 43 percent in collection fees. For this reason, making student loan payments should be a medium priority.

LOANS WITHOUT COLLATERAL
Some loans, such as credit cards, health care debts and open accounts with merchants, are low priority for payment because they do not have any collateral. If the creditor required that the homeowner offer a household good as collateral and the loan defaults, usually the household good is not worth being seized because it has a low market value. Furthermore, the court process by which the household good may be seized may be too expensive for the creditor.

Other Important Tips

LAWSUITS
Homeowners should not move a debt up in priority because the creditor threatens to sue. It is very unlikely that the creditor will carry out a suit for a debt, unless the debt is owed on a house or a car.

WITHHOLDING PAYMENTS FOR A GOOD REASON
There are many reasons for the consumer not to pay a debt or to withhold part of a debt. For example, the homeowner may have complaints concerning the conduct of lenders, collectors, contractors or service providers or may disagree about the amount that is owed. Important legal rights may exist on behalf of the homeowner when misconduct or errors by creditors or sellers has occurred. The homeowner should contact the Better Business Bureau or an attorney for legal defense.

COURT JUDGMENTS
Judgments against the homeowner should move the debt in question up in priority, but should not necessarily move it above other household needs or housing-related bills. In some states, property, wages and bank accounts are protected from seizure due to debts. The value of the property to be seized is also a criterion influencing the decision of a court. Homeowners should investigate the laws of their state before deciding how highly to prioritize debts for which a court judgment has been delivered.

ADVICE OF DEBT COLLECTORS
The homeowner should not decide which debts to pay first according to a debt collector's advice. In most instances, aggressive debt collectors may want the homeowner to pay debts that actually should be paid last. In addition, homeowners should not allow the threat of ruining their credit record to move up a debt's priority.

BAD CHECKS
The homeowner who is in a financial crisis may intentionally or unintentionally write a check without having sufficient funds in the account to cover it. One of the consequences of doing this is that the bank and the creditor both charge a fee for the check. These fees will only increase the homeowner's financial crisis. The practice of writing bad checks could expose a homeowner to investigation for criminal wrongdoing and subsequent prosecution, depending upon the circumstances. Writing bad checks could also deplete the integrity and the esteem of the homeowner.

Communicating with the Mortgage Loan Service
A lack of understanding about the process of foreclosure and the distress and panic created by the threat of losing a home may produce a tendency toward inaction. It is very important for the homeowner to understand that acting on time is essential to avoiding foreclosure. In most instances, a delay in action may end in a loss of the homeowner's legal rights. Homeowners should call their mortgage institution as soon as they begin to have financial problems. By being the first to call, homeowners establish their good faith in the eyes of the lender. There are many alternatives that can be arranged with the lender if the homeowner calls early in the process. When communicating with the lender or servicer, homeowners should keep the following steps in mind:

Identify Lender/Servicer Homeowners
First identify the lender or servicer to whom the monthly payment is owed. A servicing agent may be a bank, mortgage company or private corporation hired by the actual lender to service the loan. Servicing the loan includes collecting payment, issuing payment coupons and late notices, monitoring insurance and tax payments and handling foreclosure if necessary. Large national servicers often have different departments assigned to different stages of delinquency. Homeowners should be aware that they need to ask for the right department, so that they do not waste time and effort talking to the wrong people.

Call the Lender/Servicer
Homeowners should keep a record of all the telephone numbers, addresses and names of their contacts. When a homeowner begins to experience financial difficulty, he or she must call the appropriate division and explain the financial situation in detail. The homeowner should keep a record of this conversation, including the date and time of the call, the name of the person talked to and the response. If there are any initial agreements made during this phone call, the homeowner should write them down and keep ongoing records.

Write a Letter
Soon after making the initial phone call, the homeowner should write a letter explaining the reasons for the delay in payment and make reference to the telephone call. In this letter, homeowners should declare their willingness to continue to make payments on the home.

Respond to Inquiries
It is vital that the homeowner respond to follow-up inquiries from the lender or servicer immediately. It is not recommended that homeowners avoid contact with them, no matter how difficult or unpleasant that contact may be. Instead, homeowners who are having problems making their payments should aim to establish a paper trail, which will help demonstrate that they are cooperating. Some lenders and servicers are now making special efforts to mitigate the anxiety of the circumstances surrounding delinquency and default by reaching out to low and moderate income borrowers through the services of community organizations.

Consequences of Foreclosure
If a foreclosure is completed and the house is sold, it is rare that the homeowner can do much to recover the property. In states with redemption periods, the homeowner can reclaim the home after the sale date by repaying the entire debt. In states without redemption periods, the property belongs to the mortgage company or the highest bidder immediately after the sale. In rare cases, homeowners who question the procedure of the foreclosure have the right to start legal action against the lender or servicer in order to recover the home. In some instances, the homeowner may question the amount of money that the lender or servicer is claiming to be owed.

If the property was sold for less than the lender or servicer was owed, the homeowner may be responsible for paying the balance due and outstanding property taxes (depending on the state). If the property was sold for more than was owed to the lender or servicer, the homeowner may receive some money back. Either way, there may be tax consequences to the homeowner, as governed by local laws and the IRS. The homeowner should contact a tax accountant or attorney to determine any liability. Another serious consequence of foreclosure is that, after the sale of the home, the credit record of the homeowner will include the foreclosure.

Call 1-877-332-8700 now to talk to a counselor or complete our on-line free consultation and a counselor will contact you.

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