The U.S. Department of Housing and Urban Development (HUD) recently released its top 10 tips for homeowners who are facing foreclosure.

Homeowners unable to make your mortgage payment should follow these tips:

1. Don’t ignore the problem – The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem – Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender – The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include an important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights – Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and time frames in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options – Valuable information about foreclosure prevention options (also called loss mitigation) can be found on the Internet at

6. Contact a non-profit housing counselor – HUD funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, can organize your finances, and represent you in negotiations with your lender if you need this assistance.

7. Prioritize your spending – After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.

8. Use your assets – Do you have assets that you can sell for cash to help reinstate your loan, such as a second car, jewelry, or a whole life insurance policy? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies – Many for-profit companies will contact you promising to negotiate a loan work out with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payments) for information and services your lender or a HUD-approved housing counselor will provide for free if you contact them. You don’t need to pay fees for foreclosure prevention help. Use that money to pay the mortgage instead.

10. Don’t lose your house to foreclosure-recovery scams –If any firm claims that they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home. Never sign a legal document without reading and understanding all the terms. Get professional advice from an attorney, a HUD approved housing counselor or trusted real estate professional.

Courtesy of HUD