DC CLOUT "DC Area Real Estate Buzz"

Washington DC December Foreclosure Rate By Zip Code

zip code	foreclosure amount
20011	11
20019	10
20002	6
20020	6
20003	3
20001	3
20024	2
20032	2
20018	2
20009	2
20012	1
20036	1
20010	1
20017	1
20007	1

Fannie Mae's Website for those facing foreclosure

If you are struggling with your mortgage payments or facing foreclosure, you may feel overwhelmed and frustrated. Many homeowners simply don’t know what to do or where to go for assistance, and they feel too helpless to take action.  visit site www.knowyouroptions.com

Buy A Washington DC Foreclosure - Avoid Foreclosure

Over the past year, sales of foreclosed Washington DC properties have made up about 1/3  of the total monthly sales of Washington DC homes and condos…  The are some 'dogs' here but there are also some amazing deals..

For a list of Washington Foreclosed Property click here

For Help and Info to Avoid Foreclosure  click here

When is Foreclosure Removed from Your Credit Report

Foreclosures, deeds in lieu, short sales, bankruptcies—they can damage your credit for a long time. But by following guidelines from the FHA, Fannie Mae, or Freddie Mac, you can become a home owner again if you work to rebuild your credit and have a little patience. 

Government entities set guidelines for credit events

The chart below outlines the criteria that government entities FHA, Fannie Mae, and Freddie Mac follow for major credit-busting events, including foreclosure. Although FHA, Fannie Mae, and Freddie Mac aren’t direct lenders, they wield a lot of behind-the-scenes influence by working with banks to guarantee loans and help lenders free up capital to provide more mortgages.

One of these entities may have made your loan possible without you even knowing it. Although for the most part banks make loans to whomever they want, they’ll likely find themselves following FHA, Fannie Mae, or Freddie Mac guidelines at a minimum in order to keep working with these useful partners.

Some lenders may have more stringent policies and others, willing to take greater risks, may work outside these entities and offer more liberal lending policies.

How to read the chart

This chart offers summaries of what can be complex rules and regulations. So:

1. Look to professionals, such as a bankruptcy lawyer and a CPA specializing in bankruptcy provisions, before making major financial decisions.

2. For HUD-approved counselors, go to http://www.hud.gov/offices/hsg/sfh/hcc/fc/index.cfm. You can also call 1-888-995-HOPE for help from the Homeownership Preservation Foundation.

3. Understand what “extenuating circumstances” means in each case:

FHA: An event that was out of the borrower’s control that made a significant impact on the borrower’s finances and led to bankruptcy or foreclosure.

Fannie Mae: A nonrecurring event that’s beyond the borrower’s control that results in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.

Freddie Mac: A nonrecurring or isolated circumstance, or set of circumstances, that was beyond the borrower’s control and that significantly reduced income and/or increased expenses and rendered the borrower unable to repay obligations as agreed, resulting in significant adverse or derogatory credit information.

	FHA	Fannie Mae	Freddie Mac
Foreclosure	•3-year wait. •Reduced wait if borrower has re-established good credit and can show extenuating circumstances.	•7-year wait from the completed foreclosure sale date. •3-year wait if borrower can show extenuating circumstances (additional underwriting requirements apply for 4 years after 3-year waiting period). •7-year wait for a second home, investment opportunity, or cash-out refinancing.	•5-year wait from the completed foreclosure sale date. •3-year wait if borrower can show extenuating circumstances.
Short Sale	•No wait if not in default. •3-year wait if in default at closing of short sale. •Reduced wait if borrower has re-established good credit and can show extenuating circumstances.	•2-year wait if the borrower puts 20% or more down. •4-year wait if the borrower puts 10-20% down. •7-year wait if the borrower puts less than 10% down. •2-year wait time if borrower can show extenuating circumstances and puts 10% or more down.	•4-year wait. •2-year wait if borrower can show extenuating circumstances.
Deed in lieu of foreclosure	•Same as FHA’s foreclosure policy.	•Same as Fannie’s short sale policy.	•Same as Freddie’s short sale policy.
Bankruptcy	Chapter 7 (liquidation): •2-year wait from the discharge date of the bankruptcy. •1-2 year wait if borrower can show extenuating circumstances. Chapter 13 (repayment plan): •1-year wait from the discharge date of the bankruptcy.	Chapter 7 or Chapter 11 (reorganization, usually involving corporations or partnerships): •4-year wait from the discharge or dismissal date of the bankruptcy. •2-year wait from the discharge or dismissal date may be accepted if borrower can show extenuating circumstances.   Chapter 13: •2-year wait from the discharge date or 4-year wait  from the dismissal date. •2-year wait for a dismissal if borrower can show extenuating circumstances.   Multiple bankruptcies: •5-year wait if the borrower has filed more than one bankruptcy petition in the past 7 years. •3-year wait if borrower can show extenuating circumstances.	Chapter 7 or Chapter 11: •Same as Fannie’s bankruptcy policy.   Chapter 13: •2-year wait from the discharge date of the bankruptcy. •2-year wait from the discharge or dismissal date of the bankruptcy if borrower can show extenuating circumstances. Multiple bankruptcies: •Same as Fannie Mae’s policy for multiple bankruptcies.

Courtesy of Al Matlock Washington DC Realtor  contact Al at dcrealtor@live.com  301/452-2278

5 Steps to Owning Again After Foreclosure

It won’t be easy to obtain a mortgage after foreclosure. But with enough time, discipline, and desire, you can own your own home again. Here’s what you need to do:

1. Stick with a job after foreclosure

Did you fall into foreclosure because of the lack of a steady job? If you did, the first step toward homeownership after foreclosure is finding and holding one. And if you already have one—stick with it, unless you can move to a better one. Note that potential lenders will require stable employment before they’ll give you a new mortgage loan after a foreclosure. Even if it means taking a lower-paying job, it’s worth it.

2. Rebuild your nest egg after foreclosure

Establish a safety net. Financial planners generally recommend three to six months of living expenses in a liquid account, but since you’re coming out of foreclosure, six is a minimum to show stability and that you’re able to pay your bills—including your mortgage—for an extended period if you lose your job.

3. Raise your credit score after foreclosure

This is the hardest and most time-consuming part. After foreclosure, your credit score, according to myFICO, probably dropped by about 150 points. You’ll need to raise it back up with perseverance.

Pay bills on time and keep your credit card balances below maximum levels. The foreclosure will stay on your credit report for seven years, but if you prove your money management skills have matured, it will become less of a red mark as years go by.

Tip: Consult a housing counselor. The U.S. Department of Housing and Urban Development offers free housing counseling for distressed homeowners with a foreclosure in their past. A counselor can help you with money management and budgeting. Counseling works—an evaluation of a program in Indianapolis discovered that credit scores greatly improved because of education and counseling, and increased average borrowing power by $4,500 per family.

4. Reduce your waiting time for a mortgage after foreclosure

Normally, you would have to wait seven years after foreclosure before you can apply for a new mortgage under Fannie Mae rules. (Fannie Mae changes rules frequently. You can check the latest rules at Fannie Mae’s site.)

However, you might wait only three years if you can show extenuating circumstances for your foreclosure, which are defined as “events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.” These include:

• Losing a job

• Getting divorced

• Having unexpected medical expenses

There’s one last alternative if waiting isn’t your thing—you can obtain seller financing, essentially bypassing the traditional mortgage. If both parties are amenable, you can enter into a lease with an option to buy, or take a mortgage directly from the seller. You’ll most likely have to show some hefty reserve funds, but if you’ve turned around your financial situation quickly after your foreclosure, it’s worth a shot to deal directly with the seller.

Keep in mind that sellers may be motivated to agree to this if they need to sell and the potential buyers they’ve met with can’t obtain a conventional mortgage—perhaps because they’ve been through foreclosures, too.

5. Be honest about your foreclosure

When you’re ready to apply for your new mortgage, don’t try to hide your foreclosure. On the contrary, be proactive and reveal the steps you’ve taken to remedy the problems that led to your foreclosure.

Tip: Try a mortgage broker, who can work with a variety of lenders to find you a loan. When you work directly with a retail lender, like a bank, they have a limited pool of loans to offer you. But a good mortgage broker—one with a vast network of lendersóhas many options, and may be able to find a mortgage solution if the foreclosure in your past is creating challenges in obtaining one.

If you stay disciplined and positive, the American dream—obtaining a mortgage and owning a home of your own—can, indeed, be yours again. Even after foreclosure.

Barbara Eisner Bayer has written about mortgages and personal finance for the past 16 years for the Motley Fool, the Daily Plan-It, and Nursevillage.com, and has been the Managing Editor for CompleteGrowth.com, Mortgageloan.com, and Credit-land.com. She’s grateful that she now knows where to turn if she ever struggles to meet her mortgage payment.

Courtesy of Al Matlock Washington DC Realtor  contact Al at dcrealtor@live.com  301/452-2278

.Avoid Foreclosure Rescue Scams

A record high 2.8 million properties were hit with

foreclosure notices in 2009, putting even more Americans at risk of facing foreclosure rescue scams. Homeowners who fall behind on mortgage payments need to tread carefully when seeking assistance, since foreclosure rescue scams come in many guises. A day spent researching legitimate options, from a mortgage modification or principal forebearance to a short sale or deed-in-lieu, could keep you from becoming a scam victim.

Foreclosure rescue scams run rampant

Homeowners facing foreclosure are prime targets for scam artists. The U.S. Federal Trade Commission identified

71 companies running suspicious foreclosure rescue ads, and the Better Business Bureau counts foreclosure rescue rip-offs among its top 10 scams. Understanding how these scams work can help you avoid becoming a victim.

The variations are seemingly endless, but one popular foreclosure scam involves a representative of a so-called foreclosure rescue company promising to negotiate a deal with your lender. The rep, vowing to take care of everything, will instruct you not to contact your lender, lawyer, or credit counselor during the supposed negotiations. The more brazen ones will even tell you to pay your mortgage directly to them.

Once you pay an upfront fee or hand over a few months’ worth of mortgage payments, the scam artist will disappear. You’ll be left with an emptier wallet and a mortgage that’s in even deeper trouble because no deal was cut and no payments were made on your behalf. According to John Riggins, chief executive of the Fort Worth, Texas, office of the Better Business Bureau, upfront fees can range from $500 to $5,000.

Rip-offs come in many forms

A bankruptcy foreclosure scam can involve a promise to fend off foreclosure in exchange for an upfront fee. Instead of getting you legitimate relief, the fraudster will pocket the fee and secretly file a bankruptcy case in your name. The scam may seem to work initially, because a bankruptcy filing will stop foreclosure proceedings temporarily, but they’ll resume. Compounding your problems, a bankruptcy can mar your credit report for 10 years.

Another common scam, called the bait-and-switch, results in a scam artist taking ownership of your home. You sign documents supposedly for a new loan that will make your mortgage current. What’s really happening is you’re signing over the deed of your house. In this scenario you would still owe on your mortgage but no longer own the home.

In a rent-to-own scheme, you’re told to surrender a home’s deed as part of a deal that lets you stay put as a renter. The scam artist, perhaps claiming to be able to refinance at a better rate with you off the title, promises to sell the house back to you in the future. However, terms of the deal may make it all but impossible for you to repurchase the home, or the scammer may get you evicted by raising the rent beyond your means. Either way, you end up losing the home while remaining on the hook for the unpaid mortgage.

Look out for red flags

Being aware of the warnings signs can protect you from foreclosure rescue scams.

Red flags include:

Demands for high upfront fees.

Guarantees to stop a foreclosure.

Instructions to make mortgage payments to someone other than your lender.

Pressure to sign over a deed.

Legitimate foreclosure counselors won’t put on a full-court press, nor will they guarantee that you won’t lose your home to foreclosure. What they will do is review your financial situation and offer up options. Foreclosure counselors

approved by the U.S. Department of Housing and Urban Development won’t charge you a fee either.

Legitimate ways to get foreclosure help

There are a number of legitimate ways to contend with foreclosure. If you’ve missed mortgage payments, start by getting in touch with your lender. Ask to speak with someone in the Loss Mitigation Department and explain your situation.

Your lender may be able to arrange a repayment plan, called a special forbearance, based on your current economic circumstances. The lender could even give you a temporary reduction in your monthly payment or suspend payments for a period of time.

With a principal forbearance, the lender will reduce the amount of your mortgage, thus reducing your monthly payments. However, the amount of the principal reduction doesn’t disappear. Rather, it’s tacked on to the end of the loan, effectively creating a balloon payment.

A federally facilitated mortgage modification could also help. The

Making Home Affordable modification program pays lenders to re-work loan terms and lower monthly payments. Be prepared to gather lots of paperwork and undergo a trial modification.

If all else fails, you may need to give up your home. If so, look into the federal Home Affordable Foreclosure Alternatives program. HAFA offers lenders financial incentives to opt for a short sale or deed-in-lieu rather than a foreclosure. In a short sale, a lender agrees for a home to be sold for less than the outstanding mortgage, and then considers the debt paid off. In a deed-in-lieu, a homeowner turns over the home to the lender, and the mortgage is closed.

Donna Fuscaldo has written about personal finance for Dow Jones, the Wall Street Journal, and Fox Business News for more than a decade. Like many homeowners, her mortgage is precariously close to being underwater.

Courtesy of Al Matlock Washington DC Realtor  contact Al at dcrealtor@live.com  301/452-2278

Foreclosure Alternative: Deed in Lieu

If you’re facing foreclosure and you just want closure, call your lender and tell them you want a deed in lieu of foreclosure agreement. If you and your lender come to terms, your mortgage loan is canceled in exchange for the deed to your house, making the lender the new owner. And it can happen in a fraction of the time that it takes to do a short sale.

The deed in lieu of foreclosure: The government smoothes the way

Thank your government, or more specifically, the Home Affordable Foreclosure Alternatives Program (HAFA), for making this foreclosure alternative more enticing. The program is part of the larger Making Home Affordable program.  The HAFA program is for homeowners who can’t keep their homes with the help of a loan modification.  

The deed in lieu of foreclosure is one of three foreclosure alternatives that the government encourages lenders and borrowers to pursue. The incentive? Money. In this case you, the borrower, could get as much as $3,000. These relocation funds are part of the incentives of HAFA, but not necessarily for other short sale or deed in lieu programs of the lenders.

Advantages of deeds in lieu of foreclosure

• That $3,000 just mentioned. If you successfully complete a deed in lieu of foreclosure, you could get up to $3,000 from the lender to help you with your relocation expenses.

• You’ll be in a better situation to qualify to buy another home in the future. New Fannie Mae guidelines state that homeowners may qualify for new mortgages in as little as two years after a deed in lieu of foreclosure, as opposed to three years or more after a foreclosure.

• Legal procedures for deeds in lieu are less involved than those with foreclosures. You can move on with your life fairly quickly, points out real estate attorney Lance Churchill. With a deed in lieu, you’ll probably vacate within 30 to 60 days after coming to terms with your lender, as opposed to the four to 12 months the short sale will likely take. 

Disadvantages of deeds in lieu of foreclosure

• You may owe additional taxes. If your house is worth just $90,000 but you owe $100,000, by agreeing to a deed in lieu of foreclosure, your lender is essentially forgiving the $10,000 difference. To the IRS, that $10,000 is income, which means it can tax you on it. Don’t lose heart, though. You might qualify for an exception because of the Mortgage Debt Forgiveness Relief Act of 2007. (Note that full relief is available only if the amount of forgiven debt does not exceed the debt that was used to acquire, construct, or rehabilitate a principal residence.) Definitely consult a tax adviser for your particular situation.

• Here’s another possible problem with that $10,000: your lender may not forgive it and still try to collect that difference from you in states where this is allowed. You’ll need to watch carefully for this. Check the deed in lieu of foreclosure agreement and check local regulations since they vary on this issue. Consult an attorney for your particular situation.

• If there is another lien on your home, you probably won’t qualify for a deed in lieu of foreclosure. Lenders shy away from those situations.

• It will affect your credit score just as badly as a foreclosure will.

How to get a deed in lieu of foreclosure

• You need to make a good-faith effort to sell your home before seeking a deed in lieu, says Harlan D. Platt, economist and professor of finance at Northeastern University in Boston. Government guidelines require this, and lenders usually want you to try a short sale first.

• You need to be at least 31 days in arrears before attempting to craft a deed in lieu of foreclosure agreement, according to HUD guidelines. Exact terms vary from lender to lender.

• As mentioned above, you mustn’t have any other liens on your home.

• Your lender must participate in the foreclosure alternatives program. Check with Making Home Affordable, which has a list of participating lenders. If your lender isn’t on that list, don’t give up. Some lenders have their own programs, such as Citibank and Bank of America.

• You’ll need to prove financial hardship. Document with income verification any change in income due to job loss, death, illness, or other life event. There’ll likely be various forms to fill out. Your lender may have somewhat different procedures.

• You need to complete the deed in lieu or have foreclosure initiated within six months of the date of default, according to the Home Affordable Foreclosure Alternatives program.

• Be proactive! Even lenders that are open to a deed in lieu of foreclosure arrangement usually don’t bring it up first—you have to call them. You may be pleasantly surprised by their agreement, because it ends up costing them less money than a foreclosure.

Gwen Moran has been writing about business, finance, and real estate for more than a decade. Her work has been published by Entrepreneur, Newsweek.com, Financial Planning, Woman’s Day, and The Residential Specialist. She bucks the cottage trend and lives in a Colonial near the Jersey Shore.

Courtesy of Al Matlock Washington DC Realtor  contact Al at dcrealtor@live.com  301/452-2278

How Foreclosure Affects Your Credit Score

The way you approach mortgage delinquency and possible foreclosure can have an effect on your credit score. Prudent handling of the problem can limit, although not eliminate, the damages.

Payment history makes up the largest portion—35%—of your FICO score. And the higher your credit score, the harder you will be hit by a foreclosure, or by whatever alternate route you take because becoming delinquent on your debts had not been a regular occurrence. That is, if you’ve been good until now, one late payment has a disproportionate effect.

The biggest negative hit comes with your first late payment. If you have a credit score of 780, your first late payment could reduce your score by 90 to 110 points. And if your score is 680, it could fall by 60 to 80 points, according to Barry Paperno, consumer operations manager for myFICO. With a second late payment, your score could be hit by another 50 or so points.

If the loan goes to foreclosure, still another 50 points could be knocked off your score. If your lender doesn’t immediately report your late payment to the credit bureaus, the delay could make an even greater hit when it finally is reported.

Proper management of delinquency

However, with the first late payment on your mortgage, you can consider alternatives that may prevent you from going all the way to foreclosure, an event that probably will prevent you from buying another home with a mortgage for at least three to five years because of how lenders view a foreclosure and because your score will be so low.

A loan modification commonly is reported to the credit bureaus as “partial payments being accepted,” which in terms of credit damage, is scarcely different from a 30-day late home. But you have a better chance of keeping your home and limiting damage to your credit score if you can get a trial modification under the federal government’s Home Affordable Modification Program (HAMP).

You should know that lenders use codes from the Consumer Data Industry Association (CDIA) when reporting loans to credit bureaus, where they ultimately influence FICO scores. At first, the loan ends up generating an AC code, which indicates that partial payments are being made—not much help.

However, when that three-month trial period is successfully completed and the trial modification is converted to a permanent modification, the loan gets the CN code, which indicates the loan was modified under a federal government plan. This new CN code, which lenders are free to use or not use, does not currently affect the score because FICO has yet to assess its strength as a risk predictor, according to myFICO’s Paperno.

Other loan modifications, such as those done under a lender’s own program, may be or may not be reported as partial payments without violating the Fair Credit Reporting Act. In general, get some understanding of how the bank is going to be reporting any potential resolution, advises Paperno.

And as you live up to the terms of your new permanent modification, those late payments keep moving further into the past and the size of the dings on your credit score keep shrinking. At the same time, as you make your new, reduced payments on time, your score will begin rising. And because your new monthly payment is lower, your monthly debt obligation is lower as well, again helping raise your credit score.

Other choices and implications

As an alternative, a forbearance agreement requires you to make reduced “good faith” payments for two to six months to re-establish a positive payment history, after which you may have to resume your original monthly payments or continue reduced payments under a loan modification and sometimes immediately pay off the missed amounts. A forbearance agreement, as a partial payment program, would have the same impact on your credit score as a trial modification.

Other options include a deed-in-lieu of foreclosure, under which you turn ownership of your home to your lender, or a short sale, which is a sale for less than you owe but that is accepted by your lender as full payment. There are advantages to each, but Fair Isaac, developer of the FICO score, stresses that contrary to popular belief, foreclosure, short sale and deed-in-lieu will all have a similar impact on the your FICO score.

Other factors can affect credit scores and their ability to bounce back after any event, and you should check with a financial professional for the details in your particular situation.

State law also can affect your credit status. If, with a short sale, the proceeds are less than the amount of principal still owed, it could be treated as a charge-off and, in states that allow deficiency judgments, you could be on the hook for the difference.

If you are in the Home Affordable Foreclosure Alternatives (HAFA) program, the lender must agree not to come after you for the deficiency judgment. However, even in states where lenders can’t come after you, the rules can be complex, so be sure to have a lawyer review your paperwork.

If a deed-in-lieu or short sale is reported as a charge-off, a “settled” debt, a “debt satisfied for less than the full amount” or as “not paid as agreed,” the impact to your score could be the same as that caused by that first late payment. Ideally, you want your debt reported as “paid in full,” “paid satisfactorily” or as a “total satisfaction of debt.”

Generally, a deed-in-lieu, a short sale or a foreclosure, including those that occur after walking away from your home, are all reported the same. Once reported that’s the end of it, except for the steps you will have to take to start rebuilding your credit score, and finding another place to live, which will have to be a rental property: You won’t be able to get another mortgage for at least two years, and then only after getting your credit score up to at least 580 for an FHA-insured mortgage and 680 for a conventional mortgage.

Meanwhile, managers of large rental properties, who use credit reports and credit scores to determine whether potential renters are credit worthy, may hesitate to rent to you. So you should explore all your options in managing a mortgage delinquency.

Jerry DeMuth has written about mortgages and other financial issues for more than two decades for trade publications, major newspapers, and consumer magazines. His writing has received four awards and has been included in eight non-fiction books.

Courtesy of Al Matlock Washington DC Realtor  contact Al at dcrealtor@live.com  301/452-2278

Foreclosure Counselors: What They Can and Can’t Do

If you’re facing foreclosure, your foreclosure counselor will be a key part of your

foreclosure team. As you start looking for one, however, you need to know what exactly they do, what they don’t do, and how to choose one who’s legitimate and qualified.

What a foreclosure counselor does

Reviews your finances

Helps you establish a budget

Explains your non-foreclosure options, such as

loan modification, short sale or deed in lieu of foreclosure; helps you navigate the process with any chosen option

Advocates on your behalf with lenders and loan servicers

Counselors should also be upfront about discussing their own track records as well as the track records of the agency they work for.

Expect to spend two to 24 hours with a counselor, depending on the complexity of your foreclosure situation, including how many lenders you have to provide documentation to and negotiate with.

“Be sure the counselor is looking at your entire situation,” and not just your foreclosure, adds Martha Viramontes, director of housing at ClearPoint Credit Counseling Solutions in Los Angeles. “When counselors focus only on your mortgage, they’re fixing only one aspect of your financial situation.” They should give you an action plan containing the tasks you are going to perform to change your financial situation.

What a foreclosure counselor doesn’t do

Give tax advice

Give legal advice

Give guarantees regarding a particular outcome

Create miracles

For additional advice, add a

tax adviser and attorney to your team.

Finally, “don’t expect a counselor to be a genie,” says Douglas Robinson, a spokesperson for NeighborWorks America, a nonprofit community development corporation in Washington, D.C., that provides foreclosure counseling. “If you’re in a home that under the most aggressive scenario you can’t afford, but maybe you got into it because of some toxic loan that should never have been available in the first place, you’re probably going to have to move. It’s best you get out smoothly.”

How to choose an agency

Seek only HUD-approved agencies. HUD makes it easy:

Type in your state or ZIP code at

www.findaforeclosurecounselor.org or call HUD’s foreclosure counseling hotline at 800-569-4287 or its foreclosure prevention hotline at 888-995-HOPE (4673). HUD-approved agencies are all nonprofit, community-based organizations that have administered a housing counseling program for at least a year.

HUD-approved agencies also are required to:

Employ counselors who are knowledgeable about federal housing programs

Have a staff of counselors of which at least half must have two or more years of counseling experience. At least half must also have received housing counseling training in the past two years

Provide you with certain documents, such as a privacy agreement explaining how your personal information will be handled

In addition, at the agency you work with, see if you can find a foreclosure counselor who has certification through the NeighborWorks Center for Homeownership Education and Counseling Look (NCHEC), which has a Foreclosure Intervention and Default Certification Program. Certified counselors must follow NeighborWorks counseling standards and code of ethics and conduct. They also are required to:

Have at least one year of experience in foreclosure counseling

Attend three foreclosure prevention courses

G.M. Filisko is an attorney and award-winning writer who has seen the sad effects of foreclosure on friends and neighbors. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Forclosure info courtesy of Al Matlock - Need to sell or by contact Al at dcrealtor@live.com

How to Talk to Your Lender About Foreclosure

Many homeowners can find alternatives to foreclosure by negotiating with lenders, often with the help of foreclosure counselors. If you’re facing foreclosure, call your lender right now to determine your options, which can include loan modification, forbearance, or a short sale.

Review the details

Start by reviewing all correspondence you’ve received from your lender. The letters—and phone calls—probably began once you were 30 days past due. Also review your mortgage documents, which should outline what steps your lender can take. For instance, is there a “power of sale” clause that authorizes the sale of your home to pay off a mortgage after you miss payments?

Determine the specific foreclosure laws for your state. What’s the timeline? Do you have “right of redemption,” essentially a grace period in which you can reverse a foreclosure? Are there deficiency judgments that hold you responsible for the difference between what your home sells for and your loan’s outstanding balance allowed? Get answers.

Pick up the phone

Don’t give up because you missed a mortgage payment or two and received a notice of default. Foreclosure isn’t a foregone conclusion, but it’s heading in that direction if you don’t call your lender. Dial the number on your mortgage statement, and ask for the loss mitigation department. You might stay on hold for a while, but don’t hang up. Once you do get someone on the line, take notes and record names.

The next call should be to a foreclosure avoidance counselor approved by the U.S. Department of Housing and Urban Development. One of these counselors can, free of charge, explain your state’s foreclosure laws, discuss alternatives to foreclosure, help you organize financial documents, and even represent you in negotiations with your lender. Be wary of unsolicited offers of help, since foreclosure rescue scams are common.

Be sure to let your lender know that you’re working with a counselor. Not only does it demonstrate your resolve, but according to NeighborWorks, homeowners who receive foreclosure counseling are 1.6 times more likely to avoid losing their homes than those who don’t. Homeowners who receive loan modifications with the help of a counselor also reduce monthly mortgage payments by $454 more than homeowners who receive a modification without the aid of a counselor.

Discussing alternatives

The most attractive option that’ll allow you to keep your home is a loan modification that reduces your monthly payment. A modification can entail lowering the interest rate, changing a loan from an adjustable rate to a fixed rate, extending the term of a loan, or eliminating past-due balances. Another option, forbearance, can temporarily suspend payments, though the amount will likely be tacked on to the end of the loan.

If you’re unable to make even reduced payments, and assuming a conventional sale isn’t possible, then it may be best to turn your home over to your lender before a foreclosure is completed. Your lender can approve a short sale, in which the proceeds are less than what’s still owed on your mortgage. A deed-in-lieu of foreclosure, which amounts to handing over your keys to your lender, is another possibility. The earlier you begin talks with your lender, the more likelihood of success.

Jerry DeMuth has written about mortgages and other financial issues for more than two decades for trade publications, major newspapers, and consumer magazines. His writing has received four awards and has been included in eight non-fiction books

Courtesy of Al Matlock Washington DC Realtor  contact Al at dcrealtor@live.com  301/452-2278