Homeowner Protection From Predatory Foreclosure

Although housing foreclosures due to predatory lending practices are on a steep rise, there are many steps you can take to protect your home.  Take personal action now, use the services of the Housing and Urban Development Agency, and learn about state and federal laws that protect home ownership.

What can I do to protect myself from predatory foreclosure?  It’s a question hundreds of thousands of homeowners are asking themselves across the country right now.

In only one month in 2008, an astronomical 223,651 foreclosures were reported by RealtyTrac, a number that comes out to one out of every 550 American homes.  Yet on average, it costs lenders $50,000 dollars for every one of those homes that gets foreclosed upon.   Even sub prime lenders have every reason to work with you to keep you in your home.  So take advantage of the federal services and new and existing state and federal laws designed to protect you from predatory foreclosure.

Action Steps to Protect Yourself from Predatory Foreclosure

The Housing and Urban Development Agency (HUD) has a list of tips, federal laws, and local resources available to help homeowners avoid going into foreclosure http://www.hud.gov/foreclosure/ .  The best resources available now include free counseling which is available by calling 1-800-569-4287.

Your second most important resource is to think locally.  Housing issues related to foreclosure and predatory lending practices are governed by both federal and state legislation.   Thirty-five states already have laws that protect homeowners.  By visiting this second website, you can also look up loans, grants, and even faith-based initiatives available to help you http://www.hud.gov/local/index.cfm.

As a general rule, HUD recommends that firstly, you make sure you don’t ignore the problem.   As soon as you realize that you are in danger of losing your home contact a free counselor.   Secondly, open all mail and keep in constant contact with your lender.  Ignoring your financial concerns about losing your home will actually make it happen.  If you stay in contact with your lender you can often refinance your loan or make new payment arrangements.  

If you end up in a position where you need to sue, you can use your history of communications and the way in which the lender treated you initially to contact your attorney general, or a lawyer in order to pursue legal action.   No matter what, ongoing contact with even the most predatory lender may keep you in your home; cutting off contact will force them to foreclose upon you.

Finally, learn everything you can about the laws that protect you.   Contact your State Government Housing Office as soon as you believe you are in danger of losing your home.  Often, simply visiting your state’s local housing websites will provide you invaluable hotlines and information about services.

The Laws Protecting You from Predatory Foreclosure

It’s as important to take the right actions for yourself as it is to avoid making costly mistakes.    Under no circumstances should you sign your rights to your home away to any company that claims they will keep you out of foreclosure.  This can be the equivalent to signing away all rights to your home.  

There are also a series of laws that have been enacted to keep homeowners abreast of their rights as borrowers.  These laws include the Consumer Credit Protection Act, The Real Estate Settlement and Procedures Act, and the Home Owner’s Equity Protection Act.   Congress has also recently enacted the Foreclosure Prevention Act of 2008 which can easily be kept track of here, http://www.govtrack.us/congress/bill.xpd?bill=h110-3221.  Your HUD counselor will be able to keep you aware of the new measures that are becoming available through this bill.

Make sure you take steps now to avoid having your home foreclosed upon by a predatory lender.   Contact HUD for free counseling and stay in contact with your lender.   Keep abreast of the changes in law through the websites here, and finally, make sure you do not sign your rights as a homeowner away to any third party.