FEDERAL 

HOUSING ADMINISTRATION FEDERAL HOUSING ADMINISTRATION

www.hud.gov/fha

1-800-CALL-FHA 

(1-800-225-5342)

SAVE YOUR HOME

Tips to Avoid Foreclosure

U.S. Department of Housing and Urban DevelopmentFederal Housing Administration451 Seventh Street S.W.Washington, D.C. 20410

HUD- 2008-5-FHAFebruary 2010

SHOULD I BE AWARE OF

ANYTHING ELSE?

Beware of foreclosure prevention scams! You may be 

approached by organizations with official sounding 

names offering a quick fix to your mortgage problems. 

They often charge hefty fees or require that you 

“temporarily” sign over your deed to them. Remember 

— solutions that sound too good to be true usually are. 

These precautions will help you avoid being taken by a 

scam artist:

1. Never sign any papers you don’t fully understand.

2. Check with a lawyer, your lender or trusted advisor, 

 or a HUD-approved housing counselor before 

 entering into any deal involving a loan assumption, 

 contract of sale or a transfer of the deed to 

 your home.

3. If you can’t afford your current mortgage, don’t be 

 talked into refinancing into a new loan with a higher 

 payment.

 To find a HUD counselor in your area call:

 1-800-569-4287 or TDD 1-800-877-8339.

WHAT IS FHA?

The Federal Housing Administration (FHA) is part of 

the U. S. Department of Housing and Urban Develop-

ment (HUD) and makes homeownership available to 

individuals and families that need a little extra assis-

tance, by providing mortgage insurance on loans made 

by FHA-approved lenders throughout the United States 

and its territories. FHA borrowers are often first time homebuyers, moderate income families or folks who 

can’t afford a large down payment.

To learn more about FHA’s programs, please visit: 

www.hud.gov/fha or contact

the FHA Resource Center:

1-800-CALL-FHA (1-800-225-5342)
FHA—BUILDING COMMUNITIES BY INSURING THE AMERICAN DREAM OF HOMEOWNERSHIP FOR MILLIONS OF PEOPLE SINCE 1934

HELP! I CAN’T MAKE MY

MORTGAGE PAYMENT. 

Every day thousands of people like you have trouble 

making the next mortgage payment. Though things 

may seem hopeless, help is available. However, you 

need to take the first step! If you ignore the problem 

you may lose your home to foreclosure, possibly 

affecting your ability to qualify for credit or to rent 

another home.

WHAT SHOULD I DO?

1. Contact your lender right away. You can find a 

contact number on your mortgage statement.When 

you call, be prepared to explain:

aWhy you are unable to make your

 payment.

aWhether the problem is temporary

 or permanent.

aDetails about your income, expenses, and 

 other assets like cash in the bank.

2. If you are uncomfortable talking to your lender, a

HUD-approved housing counseling agency can help 

you understand your options. These services are free 

of charge.

3. Open all of the mail you receive from your lender. 

It contains valuable information about repayment 

options. Later mail may have important legal 

notices. Failing to read the mail will not be an 

excuse in foreclosure court!

4. Look for ways to increase the amount you have 

available to make your mortgage payments. Can you 

cancel cable TV, pack lunches, or get a part-time job? 

While these actions may not replace all of your lost 

income, they send a strong message to your lender 

that you are serious about keeping your home.

NOTHING IS WORSE THAN DOING NOTHING!

WHAT OPTIONS WILL HELP ME

KEEP MY HOME? 

If you want to keep your home and your income problem is temporary, talk to your lender about these FHA 

workout plans. While the options listed here are for 

borrowers with FHA-insured loans, most lenders offer 

similar workout plans designed to help you keep your 

home.

Special Forbearance. Your lender may provide for a 

temporary reduction or suspension of your payments to 

allow you time to overcome the problem that reduced 

your income. Then you may be offered a payment plan 

so you can pay back the missed payments a little at a 

time until you are caught up.

Mortgage Modification. A modification is a permanent 

change to your loan through which the overdue payments may be added to your loan balance, the interest 

rate may be changed or the number of years you have to 

pay off the loan may be extended.

Partial Claim. This is a one-time loan from the FHA 

insurance fund to bring your mortgage current. The 

loan is interest free and does not need to be repaid until 

you pay off your first mortgage or sell your house. This 

option is only available to borrowers with FHA-insured 

loans. However, if you have a conventional loan, ask 

your lender if they offer an “advance claim.”

FHA-Home Affordable Modification Program

(FHA-HAMP). This option combines an enhanced 

partial claim with a loan modification. Under the FHAHAMP, the partial claim loan from FHA will not only 

include any amounts necessary to bring your mortgage 

current but may also include an amount to reduce your 

existing loan balance by up to 30%. The reduced loan 

balance will then be modified to lower your monthly 

mortgage payment to an affordable level. As described 

above, the partial claim loan is interest free, but must be 

repaid when you pay off your first mortgage or sell your 

house.

To qualify for any of these options, you will need to 

provide your lender with current information about 

your income and expenses. Also, your lender may suggest that you agree to a payment plan for three or more 

months to demonstrate your commitment before you 

are approved for a modification or partial claim.

WHAT OPTIONS DO I HAVE IF I 

CAN’T KEEP MY HOME?

If your income or expenses have changed so much that 

you are not able to continue paying the mortgage, your 

best option is to move to more affordable housing. 

Most lenders offer workout plans that allow homeowners to transfer ownership to their lender or to a third 

party for less than full payoff. These options protect you 

and your family from the embarrassment of foreclosure.

Pre-foreclosure sale. With your lender’s permission you 

can offer your house for sale and sell it at fair 

market value even if the amount you receive from 

the sale is less than the amount you owe. If you meet 

certain conditions, you may be eligible to receive 

relocation expenses.

Deed-in-lieu of foreclosure. As a last resort, you 

may be able to voluntarily give your property back to 

your lender. If you leave the property clean and undamaged you may be eligible to receive relocation expenses.

There could be income tax consequences to any plan 

that reduces the amount of debt you owe so check with 

a tax advisor before accepting these workout options.

Beware of Scams! If It Sounds Too Good To Be True...It Usually Is. 

Report mortgage fraud. Call 1-800-347-3735.