For homeowners facing a foreclosure there are options available.

First, do not ignore the seriousness of the situation—it requires you to act immediately. Carefully read the default letter and find the telephone number to the loss mitigation department and the name of the representative assigned to your case. The employees in the loss mitigation department typically are the only individuals with the mortgage company that have an incentive to find a solution other than foreclosure for your loan.

Thoroughly review your loan to find the terms of your loan, for example, prepayment penalty, 15-year, 30-year, fixed rate, adjustable rate, etc. Write down the dates and amounts of your last twelve payments and evaluate your current budget situation to determine the amount of mortgage payment you can afford.

Contact the loss mitigation department and discuss your loan situation.  Be sure to understand completely why the mortgage company sent you the default letter. Then ask if the mortgage company has begun foreclosure proceedings on your account. If you think payments you made are not being posted to your account, explain the dates and request a history of your account to compare to your cancelled checks.

If you are late with your payments, explain the reasons, such as loss of employment or reduction in employment hours. Then ask the mortgage company for a written explanation of the funds required to bring your account current. Ask if company management would approve a hardship program such as a repayment plan, a loan modification, a refinance, a forbearance agreement, a short sale, or something similar.

You might want to seek legal advice. Your attorney should explain your rights and provide you with options. If you cannot afford an attorney you can contact Legal Aid listed in the government section of your telephone book. You may also want to consider selling your property or declaring bankruptcy, which may be better options for your situation.   

If you think there were misrepresentations or fraud regarding mortgage loan, or you are not satisfied by the mortgage company representative’s please contact OFIR 1-877-999-6442 or www.michigan.gov/ofir