Share the info in this post with everyone you know. Email it to family and friends. Post it on the bulletin board at church.  Talk about it in the grocery line. Don’t keep it a secret!

Fannie Mae (FNM) and Freddie Mac (FRE) insure your home loans.

If you default, they pay your lender. But did you know that they encourage your lender to avoid foreclosure whenever possible? In fact, they actually grade lenders on how well they work out delinquent loans.

“We not only rank them, we pay them to do workouts. They get a certain dollar amount for every workout type. We spent $7 million in cash bonuses” on the program last year, explained Robin Stout Migala, senior delinquency resolutions manager for Freddie Mac.

Sadly, most homeowners are clueless.  Most don’t know the work out options available to them.  Even worse, 20 percent of people say nothing would happen after missing three or more mortgage payments because “it takes a while for anything to happen if a person is late on a mortgage payment.”

You could also wind up being snared by scam artists in a foreclosure rescue scam. 

There’s a great song called, “You’re the reason our kids are ugly.” Don’t be the reason for an ugly mess when it comes to your home.  Check out Loansafe.org for the best collection of information about the foreclosure process in the Inland Empire.

What should you do if you can’t pay your loan?

1. Call your lender immediately (look for the toll-free number on your monthly statement).  Ask for the loan mitigation department.  The sooner you contact your lender, the more options will be available to you.

2. Call the Homeownership Preservation Foundation (toll-free 888-995-HOPE) or find a local HUD-approved counseling agency (toll-free 800-569-4287 on weekdays).

3. Know your loan modification options. Depending on how quickly you call your lender, the following loan modification options may be available to you: forbearance (an agreement to temporarily let you pay less or nothing while you get back on your feet); reinstatement (pay the total amount you’re behind in a lump sum by a certain date); repayment plans (you’ll be given a fixed amount of time to repay the amount you’re behind by combining a portion of what’s past due with your current payment); and, loan modifications (a written agreement between you and the lender that permanently changes one or more of the original terms of your loan to make it more affordable, such as extending the loan term or lowering the interest rate).

If your financial circumstances have changed so much that you can no longer afford to keep your house, your mortgage company may offer you one of the following options to forestall the foreclosure process:

• Loan assumption. Even if your mortgage isn’t assumable, your lender may allow someone else to take over the payments and bring the loan current. This may allow you to sell your home.
• Short sale. This option lets you sell your house for less than the amount that is owed on it. Recent, but temporary, changes to the IRS tax code mean that the difference between what you owe and the amount you’re selling for may no longer be taxable as income.
• Deed-in-lieu of foreclosure. You may be able to transfer title to your property to the mortgage company in exchange for the complete cancellation of your mortgage debt. In most cases, your lender will have required you to try to sell the house for 90 days before a deed-in-lieu will be considered.