If you’re facing challenges in meeting your mortgage payments and wish to avoid foreclosure, it’s crucial to understand your rights and the options available under the California Homeowner Bill of Rights (HBOR). Enacted to ensure fairness and transparency in the foreclosure process, HBOR provides several protections for homeowners.
A. Available Options to Avoid Foreclosure
Homeowners struggling with mortgage payments have several alternatives to foreclosure:
- Bringing loan current: If your loan has not matured, you may bring your loan current if you have the ability to do so.
- Refinance: Depending on your financial situation, you may qualify for a refinance before the property is foreclosed on.
- Pre-foreclosure sale of property: If you are not able to refinance you may be able to sell before the foreclosure is completed.
- Modification or Forbearance: Adjusting the terms of your loan to make payments more manageable; or temporarily reducing or pausing payments, subject to lender approval.
- Repayment Plan: Creating a plan to catch up on missed payments over time.
- Deed in Lieu of Foreclosure: Voluntarily transferring property ownership to the lender to satisfy the loan.
- Short Sale: Selling the property for less than the outstanding mortgage balance, with lender approval.
You may find other alternatives on the HUD website including articles on “Tips to Avoid Foreclosure” by visiting: https://www.hud.gov/topics/avoiding_foreclosure
Steps to Explore These Options:
- Contact Your Mortgage Servicer: Reach out promptly to discuss available options. Under HBOR.
- Consult a HUD-Certified Housing Counselor: These professionals can provide guidance tailored to your situation.
B. Financial Documents to Prepare
When discussing foreclosure alternatives, having the following documents ready can expedite the process:
- Proof of Income: Recent pay stubs, tax returns, or profit and loss statements.
- Bank Statements: Typically, from the past two to three months.
- Hardship Letter: A detailed explanation of the financial challenges you’re facing.
- Monthly Expense Sheet: An outline of your regular expenses.
- Mortgage Statements: Recent statements showing your loan status.
- Property Tax and Insurance Documents: Current records of taxes and insurance.
C. Toll-Free Numbers for Assistance
- Mortgage Servicer Assistance: To discuss foreclosure prevention options, contact us at (707) 757-5011
D. Additional Resources
- HUD-Certified Housing Counseling: For additional support, call the U.S. Department of Housing and Urban Development at (800) 569-4287 to connect with a housing counseling agency near you.
- Local HUD-Approved Agencies: Find nearby counseling services through HUD’s agency directory.
- Berkeley Rent Board: Residents in Berkeley can access housing counseling services by calling (510) 981-7368 (RENT) or visiting their Housing Counseling page.
Taking proactive steps and seeking guidance can significantly impact your ability to navigate financial hardships and avoid foreclosure. Remember, under HBOR, you have rights and options designed to protect you during these challenging times.