Avoiding Foreclosure

Avoiding Foreclosure

If you don’t pay your monthly mortgage payments over a period of time, the lender can foreclose. This means you will lose title to your property and may be evicted from your home. A foreclosure becomes part of your credit report and may adversely affect your ability to obtain credit in the future.

To avoid possible foreclosure, it is helpful to have money saved to cover several months of your housing costs in case of an unexpected emergency, like job loss, divorce or separation, serious illness, or the death of a loved one.

  • 1. Call your lender now!

    You may reach an individual to help you at Provident Bank by dialing (800) 686-3756, ext 16166, 16163, 16161, or 16111.

    As soon as you realize that you are unable to make your mortgage payments, talk about your circumstances with the lender to which you send your monthly mortgage payment. Your options for retaining your home are most effective when you are only one or two payments behind.

    Too many people in financial trouble wait until the last minute to call their lender. Some hope their problems will quickly resolve themselves, while others worry the lender will rush to collection or foreclosure. The truth is: the longer you wait, the greater your chance is of losing your home because of the increasing amount of debt. If you are unable to make your mortgage payment, don’t delay—call your lender immediately. In a significant number of all foreclosures, the borrowers did not return their lender's calls or written invitations to discuss payment options.

    Depending upon your situation, your lender may be able to provide you with temporary financial relief. Below are some alternatives to discuss with your lender:

    • Forbearance is an agreement to temporarily let you pay less than the full amount of your mortgage payment, or pay nothing at all, during the forbearance period. Mortgage companies may consider forbearance when you can show that funds from a bonus, tax refund, or other source will let you bring the mortgage current at a specific time in the future.
    • A reinstatement occurs when you pay your lender the total amount you are behind, in a lump sum, by a specific date. This is often combined with forbearance.
    • A repayment plan
    • A loan modification is a written agreement between you and your lender that permanently changes one or more of the original terms of your mortgage to make the payments more affordable. This option is only available for certain Federal Home Loan Bank, Fannie Mae and Freddie Mac loans serviced by Provident Bank (see below for additional details).
    • A short sale occurs when you sell your home but the sale proceeds are less than the total amount you owe on your mortgage, and your lender agrees to a short payoff and cancels the portion of your debt that exceeds the net proceeds from the sale. Credit reporting agencies will be notified accordingly, and you may owe taxes on the amount that is forgiven. Provident Bank will only consider a short sale in extreme and rare circumstances (see below for additional details). A short sale is not an option if Provident or its agents have already set a foreclosure sale date on your property.

    Some of these options may not be available to you based upon your circumstances or the type of your loan. Only your lender can apprise you of the specific options available to you after discussing your situation. After speaking with your lender’s representative, you may be asked to submit a financial package showing proof of your hardship, income, or other information so the bank can determine whether you qualify for certain relief. More details on these required documents can be found by clicking on the indicated link above.

  • 2. Contact a Non-Profit Housing or Credit Counseling Agency

    Non-profit housing and credit counselors can help you analyze your financial situation. They can help you organize a budget to pay your mortgage and other monthly expenses—without your lender’s initial direct involvement. These agencies can also help you to find and take advantage of local services or programs that provide financial, legal, medical or other support.

    You can find a credit counseling agency in your local phone book or by contacting the U.S. Department of Housing and Urban Development (HUD) at (800) 569-4287 on weekdays between 9:00 a.m. and 5:00 p.m. Eastern time. You can find a list of HUD approved agencies by calling (800) 569-4287 or TDD (800) 877-8339.