If you’re having trouble paying your mortgage, you’re not alone.   The Santa Fe Association of REALTORS® is launching a campaign to help homeowners learn how to prevent foreclosure.   For decades, homeownership has benefitted families and communities all over America with greater stability, economic prosperity, safer neighborhoods, better educational opportunities, and even improved health.   The recent increase in foreclosures threatens previous gains made in homeownership, as families who had hoped for sustainable homeownership are now struggling to pay their mortgages.   If you’re having trouble paying your mortgage for any reason, or expect problems, you should work with your loan servicer (the company that collects payments on your mortgage) or other experts to find a solution now!   If you fall behind and don’t take action, the lender will foreclose on your home.   If that happens, you may lose your home and all of the money that you have invested in it.   The sooner you act, the better the chances you will avoid foreclosure.   Talk to your Lender or Servicer   Talking to the lender, or loan servicer, the company that collects the payments, should be one of your first steps.   The earlier you call, the better your chance to work out a solution.   Here are some options:   ·          Loan Modification .  Loan servicers can help you catch up on late payments or amend your mortgage to make it more affordable.   For homeowners who face losing their home, a loan modification is often the most effective way to avoid foreclosure.   The options include: o    Adding all the missed payments to the loan amount and change the monthly payment to cover the larger loan. o    Giving you more years to pay off the loan, lowering the interest rate, and/or forgiving part of the loan, to lower your monthly payment. o    Switching from an adjustable rate mortgage to a fixed rate mortgage, so you can avoid higher monthly payments. o     Requiring amounts for taxes and insurance to be included with your monthly mortgage payment so you avoid big bills in addition to your mortgage.   Other options include these:   ·          Repayment Plan.   If you can start making payments to catch up, the lender may let you pay an additional amount each month until you are caught up.   ·          Forbearance.   Lenders may let you make a partial payment, or skip payments, if you have a reasonable plan to catch up.   Tell your lender if you expect a tax refund, a bonus, or a new job.   ·          Reinstatement.   Reinstatement refers to making payment that covers all your late payments, usually at the end of a forbearance period.   How REALTORS® Can Help   REALTORS® are in the business of helping people become homeowners and want to do everything that can to make sure you can afford to stay in your home.   ·          The best and least expensive option may be working with the company that collects payments on your mortgage (the loan servicer, which often is not your original lender). ·          If your loan servicer isn’t willing or able to help, check into refinancing your current mortgage with another lender, REALTORS® can help you find lenders that make fair and affordable loans. ·          Ask your REALTOR® or counselor if there are state and local government or local nonprofit organization foreclosure prevention programs and who to call.   Counseling agencies are in the business of helping. o    HUD-approved counseling resources in New Mexico o    Reputable counseling agencies, such as NeighborWorks® organizations, can help you avoid foreclosure.   Look up your nearest NeighborWorks® organization at www.nw.org     Remember to shop just as carefully for a mortgage as you do for a car or anything else you buy.   Getting the lowest possible rate and fees can save you many thousands of dollars over the life of the loan.   Sometimes the only option is selling the home.   Of course, no one is better at helping a seller than a REALTOR®.   It is better to sell than go through foreclosure because you can profit from any equity that remains in the home, and it will be easier to qualify for credit in the future to purchase another home.   What if I can only Sell my Property for less than I owe my Lender?   If you are struggling with your home loan and the value of the property is less than the mortgage amount, make sure you explore all options with your servicer such as a short sale or deed-in-lieu, as well as with an attorney or a housing counselor.   If some cases, REALTORS® can help explain to the lender why it makes sense to sell the property for the best price and then forgive the remainder of the debt.   Until recently, the amount of debt the lender cancelled was treated as income when you filed your tax return.   REALTORS® and others helped pass legislation that will prevent this tax burden from being placed on eligible homeowners who are relieved of their obligation to pay some portion of their mortgage debt between January 1, 2007 and December 31, 2012.   Full relief is available only if the amount of forgiven debt does not exceed the debt that was used to acquire, construct, or rehabilitate a principal residence.   Other limits also apply, consult your tax adviser or IRS guidelines  for details.     Some lenders may require you to sign a promissory note for the difference between the value of the home and the amount owed.   Before you sign any documents, seek the advice of a housing counselor or lawyer.     Foreclosure Alternatives from the Home Affordable Modification Program (HAMP)   In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the mortgage.   The short sale must be an arm’s length transaction with the net sale proceeds (after deductions for reasonable and customary selling costs) being applied to a discounted (“short”) mortgage payoff acceptable to the servicer.   The servicer accepts the short payoff in full satisfaction of the total amount due on the first mortgage.   In a deed-in-lieu of foreclosure (DIL), the borrower voluntary transfers ownership of the mortgage property to the servicer in full satisfaction of the total amount due on the first mortgage.   The servicer’s willingness to approve and accept a DIL is contingent upon the borrower’s ability to provide marketable title, free and clear of mortgages, liens and encumbrances.   Generally, servicers require the borrower to make a good faith effort to sell the property through a short sale before agreeing to accept the DIL.   However, under circumstances acceptable to the investor, the servicer may accept a DIL without the borrower first attempting to sell the property.   With either the Home Affordable Foreclosure Alternative (HAFA) short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.   Short sales and DILs are complex transactions involving coordination and cooperation among a number of parties including, but not limited to, servicers, appraisers, borrowers (sellers), buyers, real estate brokers and agents, title agencies, and often mortgage insurance companies and subordinate and other lien holders.   The HAFA program simplifies and streamlines the use of short sales and DIL options by incorporating the following unique features:   o    Complements the federal Home Affordable Modification Program by providing viable alternatives for borrowers who are HAMP-eligible. o    Utilizes borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis. o    Allows the borrower to receive pre-approved short sale terms prior to the property listing. o    Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement. o    Requires that borrowers be fully released from future liability for the debt. o    Uses standard processes, documents and timeframes. o    Provides financial incentives to borrowers, servicers and investors.   In accordance with the provisions of HAMP Supplemental Directive 09-01, a loan meets the basic eligibility criteria if all of the following conditions are met:   o    The property is the borrower’s principal residence; o    The mortgage loan is a first lien mortgage originated on or before January 1, 2009; o    The mortgage is delinquent or default is reasonably foreseeable; o    The current unpaid principal balance is equal to or less than $729,750 for one unit, higher amounts apply to 2 to 4 unit dwellings, and o    The borrower’s total monthly mortgage payment (as defined in Supplemental Directive 09-01) exceeds 31 percent of the borrower’s gross income.   Other Resources: For immediate advice, call 888.995.HOPE (4673) to speak to a counselor on how to avoid foreclosure.   This service is available in English and Spanish, 24/7.   Or visit www.995hope.org for more information.   “How to Avoid Foreclosure” (aimed at FHA borrowers but can help others as well).  www.hud.gov/foreclosure    Americans for Fairness in Lending.   To find consumer resources related to a variety of lending issues, go to www.affil.org    Center for Responsible Lending focuses on predatory lending with consumer resources at:    www.foreclosurelegalassistance.org/resources   Credit-reporting agencies: Equifax 800.685.1111   www.Equifax.com Experian 888.397.3742   www.Experian.com TransUnion 800-916.8800   www.TransUnion.com   Go to www.AnnualCreditReport.com to ask for a free copy of your credit report, once a year, or call 877.322.8228

If you’re in trouble call an attorney, New Mexico Legal Aid  or 888-995-HOPE   Watch out for companies that ask you to sign papers that waive your right to pursue legal actions against them – especially if you expect to continue struggling with your home loan.           Be wary of advertisements like “Cash for Houses/Any Situation” or “We Buy Houses for Cash”.   Many of these are scams that falsely promise rescue from a foreclosure.   Unfortunately, the “rescue” often involves the homeowner signing over the house and the family being evicted from the home.