If you have an FHA-insured loan and your lender is not responsive

Your lender has to follow FHA servicing guidelines and regulations for FHA-insured loans. If your lender is not cooperative, contact FHA's National Servicing Center toll free at (888) 297-8685 or via email hsg-lossmit@hud.gov. HUD does not oversee VA or conventional loans.

Beware of predatory lending schemes

Most mortgage lenders are trustworthy and provide a valuable service by allowing families to own a home without saving enough money to buy it outright. But dishonest or "predatory" lenders do exist and engage in lending practices that increase the chances that a borrower will lose a home to foreclosure. Beware especially of those who make high-risk second mortgages. Other abusive practices include:

• Making a mortgage loan to an individual who does not have adequate income.
• Charging excessive interest, points and fees.
• Repeatedly refinancing a loan without providing any real value to the borrower.

Borrowers facing unemployment and/or foreclosure are often targets of predatory lenders because they are desperate to find any "solution".

Homeowners receive many refinance offers in the mail saying they are "pre-approved" for credit based on the equity in their homes. Borrowing against your house may seem attractive when you are struggling to pay your mortgage and other bills. But stop and think about this: if you can't make your current payments, increasing your debt will make it harder to keep your home, even if you get some temporary cash.
Beware of scams

• Equity skimming: If a "buyer" approaches you offering to repay the mortgage or sell the property if you sign over the deed and move out - it may be a scam. Signing over your deed does not necessarily relieve you of the responsibility of paying the loan.
• Phony counseling agencies: If you have any doubt about paying for counseling (that is often free of charge) call a HUD-approved housing counseling agency toll free at (800) 569-4287 or TDD (800) 877-8339 before you pay anyone or sign anything.
• Do not sign anything you do not understand - it is your right and duty to ask questions.
• Information is your best defense against becoming a victim of predatory lending.

Where to report suspected predatory lending

Homeowners can either visit the Stop Mortgage Fraud website or call toll free (800) 348-3931 to get information on what steps to take to file a complaint. Homeowners who call will also receive a booklet containing information found on the website.

For more information about predatory lending go to:

· Freddie MAC's Predatory Lending

· Freddie MAC's "Don't Borrow Trouble"

What happens when I miss my mortgage payments?

Foreclosure may occur. This means your lender can legally repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued, meaning you would not only lose your home, you also would owe HUD money.

Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if at all possible.

What should I do?

· Do not ignore letters from your lender. If you are having problems making your payments, call or write to your lender's loss mitigation department immediately.

· Explain your situation to the lender and be prepared to provide your financial information. Without this information, he/she may not be able to help.

· Stay in your home for now. You may not qualify for assistance if you abandon your property.

· Contact a HUD-approved foreclosure housing counseling agency toll free at 1-800-569-4287 or TDD 1-800-877-8339. These agencies have valuable information on services and programs offered by government and private and community organizations including credit counseling. Typically, their services are free of charge.

Who is my lender? How do I make contact?

Look at your monthly mortgage coupons or billing statements for the lender's name and contact information.

I don't remember what type of mortgage I have. How can I find this information?

Look on the original mortgage documents or call your mortgage lender.

Do I need to keep living in my house to qualify for assistance?

Usually yes, but call your lender to discuss your specific circumstances and get advice on options that may be available.

My employer has already announced layoffs in the coming month. What can I do now?

You have started learning about available options here. Now, figure out if a layoff will make it hard for your family to make your mortgage payments. If so, consider other resources you have to pay your mortgage. Review your spending habits and see where you can reduce spending. If you have a lot of other debt, consider contacting a nonprofit, consumer credit counseling agency. Take advantage of any help your employer offers. If you still believe you will have trouble making your mortgage payments, contact your lender right away.

What are the key points to remember?

1. Explore every alternative-don't lose your home and damage your credit history.

2. Call or write your mortgage lender immediately and be honest about your situation.

3. Stay in your home to make sure you qualify for assistance.

4. Arrange an appointment with a HUD-approved housing counselor to explore your options. Call toll free at (800) 569-4287 or TDD (800) 877-8339.

5. Beware of scams.

6. Never sign anything you don't understand. And remember that signing over the deed to someone else does not necessarily relieve you of your loan obligation.

7. Act now. Delaying can't help because if you do nothing, you will lose your home and your good credit rating!

What precautions can I take?

These precautions can help you avoid being "taken" by a scam artist:

· Don't sign any papers you don't fully understand.

· Make sure you get all "promises" in writing.

· Beware of loan assumptions in which you are not formally released from liability (responsibility) for your mortgage debt.

· Check with a lawyer or your mortgage company before entering into any deal involving your home.

Check to see if there are any complaints against the prospective buyer. You can contact your state's Attorney General, the State Real Estate Commission, or the local District Attorney's Consumer Fraud Unit for this information.

Will I be responsible for any out-of-pocket expenses if I am approved for a workout option?

You may have to pay expenses such as recording fees for a loan modification depending on your lender. But if a lender has to start foreclosure, you may have to pay very high legal fees. To avoid this, call your lender as soon as you realize you might have trouble.

Servicemembers Civil Relief Act (SCRA)

Common questions and answers for reservists, guardsmen and other military personnel about mortgage payment relief and protection from foreclosure provided by the Servicemembers Civil Relief Act (formerly known as The Soldiers' and Sailors' Civil Relief Act of 1940).

Who is eligible?

The Act applies to active duty military personnel who had a mortgage obligation before enlistment or before being ordered to active duty. This includes:

• Members of the Army, Navy, Marine Corps, Air Force, Coast Guard.
• Commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration engaged in active service.
• Reservists ordered to report for military service.
• People ordered to report for induction under the Military Selective Service Act.
• Guardsmen called to active service for more than 30 consecutive days.

In limited situations, dependents of servicemembers are also entitled to protections.

Am I entitled to debt payment relief?

The Act limits the interest that may be charged on mortgages incurred (or acquired) by a servicemember (including debts incurred jointly with a spouse) before he or she entered into active military service. Mortgage lenders must, at your request, reduce the interest rate to no more than 6% per year during the period of active military service and recalculate your payments to reflect the lower rate. This provision applies to both conventional and government-insured mortgages.

Is the interest rate limitation automatic?

No. To ask for this temporary interest rate reduction, you must submit a written request to your mortgage lender and include a copy of your military orders. The request may be submitted as soon as the orders are issued but no later than 180 days after the date of your release from active duty military service.

Am I eligible even if I can afford to pay my mortgage at a higher interest rate?

If a mortgage lender believes that military service has not affected your ability to repay your mortgage, they have the right to ask a court to grant relief from the interest rate reduction. This is not very common.

What if I can't afford to pay my mortgage even at the lower rate?

Your mortgage lender may let you stop paying the principal amount due on your loan during active duty service. Lenders are not required to do this but they generally try to work with servicemembers to keep them in their homes. You will still owe this amount but will not have to repay it until after you complete active duty service.

Additionally, most lenders have other programs to assist borrowers who can't make their mortgage payments. If you or your spouse finds yourself in this position at any time before or after active duty service, contact your lender immediately and ask about loss mitigation options. If you have an FHA-insured loan and are having difficulty making mortgage payments, you may also be eligible for special forbearance and other loss mitigation options.

Am I protected against foreclosure?

Mortgage lenders may not foreclose (seize property for failure to pay a mortgage debt) while you are on active duty or within 90 days after military service without court approval. In court, the lender would be required to show that your ability to repay the debt was not affected by your military service.

What information do I need to provide to my lender?

When you or your representative contacts your mortgage lender, you should provide the following information:

• Notice that you have been called to active duty.
• A copy of the orders from the military notifying you of your activation.
• Your FHA case number.
• Evidence that the debt precedes your activation date.

HUD has reminded FHA lenders of their obligation to follow the Act. If notified that a borrower is on active military duty, the lender must advise the borrower or representative of the adjusted amount due, provide adjusted coupons or billings, and ensure that the adjusted payments are not returned as insufficient payments.

Will my payments change later? Will I need to pay back the interest rate "subsidy" at a later date?

The change in interest rate is not a subsidy. Interest in excess of 6% per year that would otherwise have been charged is forgiven. However, the reduction in the interest rate and monthly payment amount only applies during the period of active duty. Once the period of active military service ends, the interest rate will revert back to the original interest rate, and payments recalculated accordingly.

How long does the benefit last? Does the period begin and end with my tour of duty?

Interest rate reductions are only for the period of active military service. Other benefits, such as postponement (delaying) of monthly principal payments on the loan and restrictions on foreclosure may begin immediately upon assignment to active military service and end on the third month following the term of active duty assignment.

How can I learn more about relief available to active duty military personnel?

Servicemembers who have questions about the SCRA or the protections that they may be entitled to may contact their unit judge advocate or installation legal assistance officer. Dependents of servicemembers can also contact or visit local military legal assistance offices where they reside. A military legal assistance office locator for each branch of the armed forces is available.