Foreclosure & Housing Counseling FAQ
No, Take Charge America does not charge a fee for foreclosure counseling. As a non-profit housing and credit counseling agency, certified by the U.S. Department of Housing and Urban Development (HUD), Take Charge America provides free housing counseling to Arizona residents who are at risk of foreclosure or need financial guidance before purchasing a home.
Options are determined on a case-by-case basis and depend on the type of loan, loan status, lender and the homeowner’s financial situation. Homeowners having difficulty meeting their mortgage payments are encouraged to call a Take Charge America HUD-certified housing counselor at (623) 266-6382. A housing counselor will identify all possible solutions and provide follow-up and support until the homeowner’s situation is resolved.
The length of the initial counseling session averages 45 minutes to 1.5 hours. It can take a lender several months to work out loan modifications. A Take Charge America housing counselor will guide the homeowner through the entire process.
In order to assist each homeowner, Take Charge America is required to obtain authorization forms along with loan documents, a detailed budget, hardship letter, two months most recent bank statements, and two most recent paystubs. These items must be available in order to complete the initial counseling session.
Yes, it is important for a borrower to communicate with their lender when facing financial hardship. During foreclosure counseling, many lenders will contact the homeowner to review and verify the information submitted by the housing counselor. Any loan modifications or workable solutions are completed between the lender and borrower. The housing counselor provides guidance through the process and ensures the homeowner is financially knowledgeable to accept or decline any lender approved loan modifications.
A short sale happens when the lender accepts an offer from a buyer on a delinquent property for less than what is owed on the loan. Most lenders require the home to be on the market for at least 90 days seeking fair market value before a short sale offer is reviewed or accepted. A short sale will have a negative affect on the sellers’ credit score and will show for seven years. Most sellers are not able to purchase another home for two to three years after a short sale.
Deed in lieu of foreclosure is an agreement made between the delinquent borrower and the lender. If the lender agrees to forgive the loan, the borrower agrees to give back the keys and deed to the property, and move out. Deed in lieu of foreclosure has the same negative affect on the credit report as a foreclosure yet fees usually do not apply.
When a lender reports that a home was foreclosed on, it’s listed on the credit report for seven years under public records. Generally, when lenders pull a credit report and it shows that there is a foreclosure within the last five years, they will not approve the loan. If it has been five years, they may approve the loan but with higher fees or interest rates.
Once a lender starts the foreclosure process, various legal fees are typically added to the loan balance. These fees include, but are not limited to, court filing fees, fees for process servers, lawyer fees, various auction fees, inspection fees and eviction fees, if applicable.
30+ Days Late
From the 31st day, the COLLECTIONS or LOAN SERVICING department of a mortgage company will start calling the homeowner to collect past due payments. This division accepts and applies the mortgage payment each month, tracks late fees, monitors escrow funds when included in the payment, and will pay the taxes and insurance when due.
60+ Days Late
On the 61st day, the loan payment is two months past due, and if the collections department has not been able to collect or make acceptable payment arrangements, the homeowner’s account will be turned over to the LOSS MITIGATION DEPARTMENT. Loss mitigation is a division of the mortgage company that will try to find an acceptable plan to get the homeowner back on track with mortgage payments. The homeowner will begin to receive letters requesting him or her to call the department. More options will become available during this period.
90+ Days Late
On the 91st day (in AZ), a third party TRUSTEE takes over the delinquent account. The trustee will send a “Notice of Sale” stating that the property will be sold 90 days from the date the Notice was filed and recorded. The mortgage company will not send any additional letters. It is now solely up to the homeowner to contact the trustee directly, or through a U.S. HUD-certified housing counselor. Unless the homeowner acts quickly, the house will be sold at auction on the date specified.
*This information is from the Arizona Foreclosure Prevention Task Force.