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-FHAApril 2012

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 is part of the U.S. 

Department of Housing and Urban Development (HUD). 

FHA provides mortgage insurance to approved lenders who 

in turn offer mortgage loan financing to individuals and 

families throughout the United States and territories. The 

FHA mortgage insurance enables approved mortgagees 

to provide home loans to eligible borrowers who might 

not otherwise qualify for other mortgage loan financing. 

FHA borrowers are often first-time homebuyers, moderate 

income families or folks who can’t afford a large 

downpayment.

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)

Federally Insured, Always There!
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 prevent 

a foreclosure action.

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? 

FHA provides, as part of its insurance contract with 

lenders, loss mitigation actions the lender must evaluate 

and take, when appropriate, to reduce financial losses on 

loans in default. Your lender needs information from you 

to fully evaluate these options. If you want to keep your 

home, talk to your lender about available workout options 

for home retention. 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. An extended forbearance period may 

be provided to unemployed borrowers who are actively 

seeking employment.

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. In a Partial Claim, a borrower receives a 

second loan in an amount necessary to bring the delinquent loan 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 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 require 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 even 

under a workout plan offered by your lender, you should 

consider the options below. 

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.

Contact FHA

Struggling homeowners with FHA-insured loans can 

get assistance by contacting HUD’s National Servicing 

Center at (877) 622-8525. Persons with hearing or speech 

impairments may reach this number via TDD/TTY by 

calling (800) 877-8339.

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

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