When Your American Dream Turns Into a Nightmare

turns into a nightmare

It's the moment you've anticipated your whole life: fitting your key into the lock of your dream home, the place where you envision raising your kids, celebrating holiday traditions and hosting parties for friends and family.

For homeowners facing foreclosure, however, that dream can quickly turn into a nightmare. In a foreclosure, your lender can exercise the right to take ownership of your home if you miss a certain number of payments. While foreclosures have always been a depressing reality in the banking industry, in the last year or two they have become an increasingly common outcome.

where to go if you're facing foreclosure:

• Oregon Division of Finance and Corporate Securities: www.dfcs.oregon.gov (under "Information for Consumers,"

click on "Foreclosures in Oregon") (503) 378-4387

• For information about the Federal Housing Administration FHASecure program: www.fhasecure.gov (800) 569-4287

• For information about HOPE NOW: www.hopenow.com (888) 995-HOPE

• United States Department of Housing and Urban Development, www.hud.gov/foreclosure, (800) 569-4287

• If you suspect a foreclosure scam, contact the Oregon State Attorney General's office: www.doj.state.or.us or (877) 877-9392

If you're facing foreclosure, here are some steps you can take to stay in your home:Recognize that the problem will not "just go away"

According to Brett Funk, senior real estate loan officer at People's Bank in Medford, "The most important thing to remember if you think you're facing foreclosure is to be proactive instead of reactive." In other words, take steps to avoid foreclosure before it becomes the only option.

The Department of Housing and Urban Development (HUD) urges homeowners to open all mail from the lender, especially the first letters they send to you, as those letters will outline your options. HUD also recommends selling other assets or getting a second job to pay your mortgage. Even if it doesn't solve the financial problem, your lender will see that you're committed to paying your mortgage bill.Learn more about foreclosure:

HUD offers free and low-cost counseling to those facing foreclosure. It can provide education and some financial advice, and the department may be able to help negotiate with your lender. You can talk to a counselor by calling (800) 569-4287.

At the state level, The Oregon Department of Finance and Corporate Securities offers a brochure called "Foreclosure: You Can Avoid It" that lays out the foreclosure process specific to Oregon and gives strategies for keeping your home. This brochure provides a wealth of contact information and outlines some options, like reverse mortgages (for those 62 and older). You can request the brochure by calling (503) 378-4387, or you can get it online at www.dfcs.oregon.gov.Call your lender:

Judith Foltz, of John L. Scott in Medford, recommends that your first step be to call your lender. Many offer special programs — like payments added to the back of a loan or a payoff that's less than the lender is owed (also known as a "short sale"). Funk also recommends calling your lender as soon as possible, as they may be willing to lower your interest rate or switch your loan from an adjustable rate mortgage to a fixed rate. Look into assistance programs:

Federal programs are available to assist some homeowners facing foreclosure. For example, the Federal Housing Administration (FHA) offers a program called FHASecure, which gives "homeowners with non-FHA adjustable rate mortgages ... the ability to refinance into a FHA-insured mortgage."

According to Pam Westland, real estate loan division manager at People's Bank, another resource for homeowners facing foreclosures is HOPE NOW, which she describes as a group of "larger lenders who have affiliated and combined forces in their commitment to keeping people in their homes."Ensure you're working with a reputable organization:

Westland also advises people to stick with reputable sources when exploring options for avoiding foreclosures because as the number of foreclosures rises, so does the number of foreclosure scams. The best way to avoid a fraudulent business or organization, advises Westland, is to work out arrangements directly with the lender. Also, if you or somebody you know has been the victim of a foreclosure scam, or if someone is setting you up for a scam, she recommends you call the state attorney general's office.

Facing foreclosure can be a terrifying experience — the lack of control, the confusing terminology, and the embarrassment can be paralyzing. But if you stay focused on the main goal — staying in your home — and take the right steps, you may be able to live out your American dream after all.

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