As you know, a record number of American families are facing or are at risk of foreclosure.  According to data from the Mortgage Bankers Association, foreclosures and delinquencies are at their highest level in more than 30 years.  Much of the problem can be traced to the proliferation of subprime and other exotic adjustable rate loans given to consumers with little regard to the borrower's ability to repay.

If you are having trouble with your mortgage or are facing foreclosure, here are important steps to take:

1) Talk to your Lender or Loan Servicer of your Current Loan- Your loan servicer is responsible for collecting your monthly loan payments and crediting your account. Speak to your loan servicer about refinancing options, including the federal programs detailed below, state finance initiatives, and any other loan modifications that are appropriate for your financial circumstances. If you require help in identifying the company that handles your mortgage you can use the online resource of MERS Servicer ID or its phone-based MERS Servicer Identification System at 1-888-679-6377. If your lender is not cooperative, talk to a legitimate housing counselor and they may be able to help you with your lender.

2) Talk to a Legitimate Housing Counselor- Housing counselors can help you understand your mortgage options, negotiate with your lender and avoid foreclosure assistance scams. If you have worked with a qualified housing counselor, you should contact them again. The U.S. Department of Housing and Urban Development (HUD) provides a variety of resources for homeowners at risk of foreclosure. The Department funds free housing counseling services throughout the country. HUD-approved counselors can help homeowners understand the law and their options, organize their finances, and represent borrowers in negotiations with their lenders if this assistance is needed. If you need help locating a qualified a HUD-approved housing counselor in your area, call HUD's interactive voice response system at 1-800-569-4287.
HUD-Approved Housing Counseling Agencies in your State
Additional HUD resources for avoiding foreclosure

Also, free counseling is available through NeighborWorks, which is a national network of more than 240 community-based nonprofit organizations created by Congress to provide financial support, technical assistance, and training for community revitalization efforts. NeighborWorks provides a variety of resources for preserving homeownership in the face of rising foreclosure rates including HOPE for Homeowners, a toll-free national hotline that offers free foreclosure prevention and counseling advice from a third party, HUD-certified, not-for-profit network of counseling agencies dedicated to helping homeowners avoid foreclosure.
HOPE for Homeownership Hotline (in English and Spanish): 1-888-995-HOPE
Find a HUD-certified NeighborWorks organization
Information on the Center for Foreclosure Solutions

3) Contact State Foreclosure Prevention Programs- State Housing Finance Agencies administer a wide range of affordable housing and community development programs. A number of state HFAs have partnered with other entities (including nonprofit counseling agencies, local governments, state housing departments and lenders) to provide comprehensive foreclosure prevention and mitigation strategies.
Rhode Island Housing

Homeowners who suspect that they have been a victim of fraud, misleading information, or other deceptive practices, should contact their state Attorney General's office.  These offices investigate complaints and sue lenders and other mortgage originators for alleged illegal behavior.  In addition, several state Attorneys General have been instrumental is setting up multi-agency foreclosure prevention task forces that provide financial resources and proactive intervention for homeowners facing or at risk of foreclosure.
Rhode Island's Attorney General

4) Contact the Federal Government about Federal Foreclosure Assistance Programs- Making Home Affordable is a federal program designed to help homeowners refinance mortgages and avoid foreclosure. Contact their current lender, any other qualified FHA approved lender or a housing counselor. For more information or to find an FHA-approved lender in your area, go to the FHA website or call HUD's interactive voice response system at 1-800-569-4287.

HOPE for Homeowners
The HOPE for Homeowners program began October 1, 2008 and ends September 30, 2011. The program is available only to owner occupants who are unable to pay their existing mortgages without adjustments to their current loan and offers 30-year, fixed-rate mortgages insured by HUD's Federal Housing Administration (FHA). The program is voluntary--both the borrower and current lender must agree to participate. Participating lenders will have to write down the existing mortgage to 90 percent of the new appraised value of the home. Borrowers are encouraged to contact their current lender to determine eligibility, but may be eligible if, among other factors: (1) the home is their primary residence, and they have no ownership interest in any other residential property; (2) their existing mortgage was originated on or before January 1, 2008, and they have made at least six payments over the life of the current loan; and (3) as of March 2008, their total monthly mortgage payments due were more than 31 percent of their gross monthly income. The new mortgage will be no more than 90 percent of the new appraised value of the borrower's home. The maximum loan amount is $550,440. The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.

FHA Secure
The FHA Secure program began in September 2007 and is currently scheduled to end December 31, 2008. It gives qualified borrowers who have been delinquent on their existing non-FHA adjustable rate mortgages (ARMs), the ability to refinance into a fixed-rate, FHA-insured mortgage. With FHA Secure, the lender may offer the borrower a second mortgage to make up the difference between the current value of the home and the amount owed. In addition, if they can afford it, borrowers may be able to roll post reset arrearages into the new mortgage.

Here is a helpful list of other government and nonprofit organizations that have developed foreclosure prevention programs-

National Community Reinvestment Coalition (NCRC)
NCRC is a national coalition of more than 800 non-profit organizations that seek to increase the flow of private capital into underserved communities.  NCRC's Consumer Rescue Fund works with victims of predatory lending to provide mediation, refinancing or renegotiation of mortgages.  Refinancing services are currently available in the states of: Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Nevada, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas and Wisconsin.
NCRC’s Information and CRF Services line: 202-628-8866
Website for the CRF

National Council of LaRaza (NCLR)
NCLR is the largest national Hispanic civil rights and advocacy organization in the United States.  NCLR's Homeownership Network of 42 community-based organizations provide home ownership counseling and can intervene between borrowers facing financial crisis and the lenders and/or mortgage servicer.
Contact NCLR’s: 202-785-1670
NCLR’s Website

Neighborhood Assistance Corporation of America (NACA)
NACA is a national non-profit advocacy and homeownership organization.  NACA's Refinance Program offers new loans to eligible homeowners with unaffordable mortgages.  NACA's Home Save program gives counseling and financial assistance to eligible homeowners who are at risk of foreclosure.
NACA's Information and Refinancing Services line: 1-888-302-NACA
Website for NACA

Government Sponsored Enterprise (GSE) Resources:
Freddie Mac
Freddie Mac helped to develop and fund Don't Borrow Trouble, a comprehensive consumer awareness and foreclosure prevention campaign.  In addition, Freddie Mac has partnered with national non-profit organizations, counseling agencies and several lenders on a foreclosure-avoidance initiative designed to reach out to delinquent borrowers early on and provide appropriate counseling through trusted intermediaries to help avoid foreclosure.
Information on Don’t Borrow Trouble

Legal Resources- In addition to the resources above, some homeowners may want to retain an attorney to help them navigate the legal system:

National Association of Consumer Advocates
The National Association of Consumer Advocates (NACA) is a nationwide organization of more than 1000 attorneys who represent and have represented hundreds of thousands of consumers victimized by fraudulent, abusive and predatory business practices.  NACA attorneys have represented thousands of victims of predatory lending practices.  The legal services are provided by legal service lawyers and private practice attorneys who provide free or low-cost legal representation.
Contact NACA: 202-452-1989
Find an attorney

(Prepared by Financial Services Committee, Democratic Staff)