Learning Center

What is Foreclosure?
What should I do if I fall behind on mortgage payments?
What are Some of the Causes of Foreclosure?
What Occurs During the Foreclosure Process?
How can I Avoid Foreclosure?

Question:		What is Foreclosure?
Answer:		Foreclosure is the legal process your lender must follow to end your ownership rights to your home if you have failed to make your mortgage payments. Mortgage lenders usually consider a mortgage to be in default if payments have not been made in three months. When a loan is in default, the lender can begin the mortgage foreclosure proceedings in accordance to the state laws where the property is located.

Question:

What should I do if I fall behind on mortgage payments?

Answer:

Call 1-877-Get-Hope and you will be connected with a certified foreclosure prevention counselor to discuss your specific situation. This is a FREE service offered by the Indiana Foreclosure Prevention Network. The counselor will discuss your options and help you find the best solution to your situation. You can begin the process by going to our Get Hope Now section and filling out the contact request form.

Information to Have Ready When You Call or fill out the on-line assessment:

Gather the following financial information:

Your loan account number.
A brief description of your circumstances.
Recent income documents such as:
- Pay stubs.
- Benefit statements from Social Security, disability, unemployment, retirement, or public assistance.
- If self-employed, have your tax returns or a year-to-date profit and loss statement available for reference.
List of household expenses.

Some questions that the counselor might ask include:

What events caused you miss your mortgage payment?
Do you have any documents that will help explain your reasons for falling behind?
What steps have you take to address the problem?
Is your problem temporary, long-term, or permanent?
What other issues (financial or otherwise) may be keeping you from getting back on track with your mortgage?
Do you want to keep your home?
What type of payment arrangement might work for you?

Question:		What are Some of the Causes of Foreclosure?
Answer:		There are numerous reasons why homeowners default on their loan. Most causes are related to financial hardships, often due to reasons beyond their control. The most common causes are job loss, medical expenses due to injury or illness, divorce, death of spouse or expenses exceed income.

Question:		What Occurs During the Foreclosure Process?
Answer:		In Indiana, the mortgage company initiates a foreclosure by filing a lawsuit in court. The borrower is served with a copy of the complaint and summons by a sheriff. The borrower then has approximately 20 days to file an answer with the court. If the homeowner does not file an answer, the court will assume the homeowner does not dispute the mortgage company’s claims and will most likely enter default judgment against the homeowner. If the homeowner files an answer refuting the mortgage company’s claims, the court may take further action before ruling and issuing an order or judgment. For more information please see the "What is the Foreclosure Process" .

Question:		How can I Avoid Foreclosure?
Answer:		The first step in foreclosure prevention is to take control of your financial situation by understanding your income and your expenses. You will greatly reduce your anxiety when you understand where your money comes from and where you are spending it. Developing a budget is the simplest way to begin to understand your financial situation. Budgeting will help you plan for meeting your expenses as well as begin to build assets. To speak with a financial counselor about budgeting call 877-GET-HOPE or got to our Get Hope Now section and fill out the contact request form.