It’s no secret that our current economy has put thousands of Virginians at risk of losing their homes. Foreclosure should be avoided if at all possible, because it can cause issues with your credit report for many years, leading to major problems when you apply for credit cards, car loans or another mortgage someday in the future.
Avoid Foreclosure When You Buy a Home
Preventing foreclosure should begin when you decide to buy your first home. Borrow only what you can afford. Remember when you buy a home at the upper end of what you qualify for, you may have unexpected expenses. An illness, a change in employment, or the birth of a baby — any of these life events could impact your income and make it harder to pay the mortgage. One way to make sure you’re financially prepared for homeownership is to take VHDA's free Homebuyer Class.
Behind in Your Mortgage Payments?
Reputable mortgage lenders really don’t want to foreclose. If you anticipate a serious problem paying your mortgage because of a financial emergency, don’t wait until you’ve missed several payments! Contact your lender as soon as possible. If you deal honestly with your mortgage lender, you may be able to get your loan modified or have payments temporarily suspended. You can also contact a HUD-approved Housing Counselor to help you figure out your options and prepare you to work with your mortgage lender.
VHDA Customers: We May be Able to Help
If you’re behind in your mortgage payments and VHDA is your lender, you may qualify for VHDA's Loss Mitigation program — download our Borrower’s Financial Package to learn more. Remember, the sooner you contact us, the more options we may have to help you save your home. Please call 888-756-8603. (Español: 877-843-2123.)
Veterans: VA Loan Modifications Possible
A new rule by the U.S. Department of Veterans Affairs (VA), effective February 7, 2011, makes VA loan modifications more flexible and encourages lenders to modify more loans. It also states that when a state housing finance authority (including VHDA) holds a loan, the interest rate on a modified loan may now remain the same as the original interest rate when the law governing the state agency’s program prohibits an interest rate change. The new rule also:
- Requires VA approval prior to any modification that increases the interest rate by more than 1 percent over the existing interest rate.
- Allows veteran borrowers to obtain a loan modification even after the foreclosure process has started by allowing legal fees and foreclosure costs to be capitalized into the loan balance.
Foreclosure Prevention Resources:
- VirginiaForeclosureInfo.com – Learn what’s being done by Governor McDonnell’s administration to address the issue of foreclosure in Virginia.
- Housing Counselors in Virginia – Find a counselor near you for housing advice you can trust. Be sure to ask if there is a charge and whether your housing counselor is certified.
- Trying to avoid foreclosure? This app can help. – If you’re a distressed homeowner, free housing counseling can help you avoid foreclosure and understand what mortgage options are available. And now, thanks to HUD’s new mobile app, it’s easy for Apple smartphone and Apple tablet users to find certified housing counselors in their community. There is help out there and it’s right at your fingertips.
- KnowYourOptions.com – Information and resources from Fannie Mae will help you understand your choices, whether staying in your home or leaving it. Be sure to check out the interactive video designed to help you learn about preventing foreclosure.
- Español – Información sobre las Ejecuciones Hipotecarias en Virginia.