Foreclosure is every homeowners’ worst nightmare. If the thought of losing your home is keeping you up at night, heed this advice from the U.S. Department of Housing:

  1. Don’t ignore the problem

    The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

  2. Contact your lender as soon as you realize that you have a problem

    Lenders do not want your house. They have options to help borrowers through difficult financial times.

  3. Open and respond to all mail from your lender

    The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

  4. Know your mortgage rights

    Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

  5. Understand foreclosure prevention options

    Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at

  6. Contact a non-profit housing counselor

    The U.S. Department of Housing and Urban Development funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance.

  7. Prioritize your spending

    After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment.

  8. Use your assets

    Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan?

  9. Avoid foreclosure prevention companies

    Many for-profit companies will contact you promising to negotiate a loan work out with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD approved housing counselor will provide for free if you contact them.

  10. Don’t lose your house to foreclosure recovery scams!

    If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice.

Valuable advice for saving what is likely your most valuable asset. Don’t let foreclosure happen to you. If you are buying a home, be sure to read any and all documentation before signing.

Credit: HUD Release