One of the most frequent 'concerns' that the MN Home Ownership Center receives from clients that are trying to be proactive about foreclosure avoidance - that is, they are trying to work with their lender/servicer BEFORE they fall behind in payments - is that their lender can't work with them until they are already delinquent.
In some instances... this was actually due to an invester policy with FHA-backed mortgages. Homeowners were not eligible for loss mitigation services until they were at least 30 days behind on payments
HUD has announced a rule change for FHA-backed mortgages, and now homeowners experiencing financial hardship who have FHA loans are now eligible for loss mitigation before they fall behind on their monthly payments. Now, loss mitigation options of forbearance and FHA-HAMP may be used when borrowers are “facing imminent default.” For more information, see HUD’s press release here.
If at all possible... homeowners should seek solutions BEFORE falling behind in payments. If you, or someone you know is struggling with mortgage payments... don't wait until it's too late. To find your local non-profit, FREE Foreclosure Counselor, click here. For additional information about preventing foreclosure in Minnesota, click here.