[Springfield, Ill.] (May 19, 2009) Job losses or other financial setbacks are making it harder for some homeowners to make their mortgage payments. To avoid foreclosure, one option may be a mortgage loan modification, a process in which one or more terms of the loan are modified
to lower a homeowner’s monthly payments.

“Foreclosures affect not just the homeowner but also the community as a whole so it is in
everyone’s best interest to make sure more people keep their homes,” says Nancy Long, ABR, CRS, GRI, president of the Capital Area Association of REALTORS. “For homeowners who fear falling behind, there are options that can help you make your mortgage more manageable.”

The Obama Administration’s new Making Home Affordable program, at www.makinghomeaffordable.gov is aimed at helping as many as 9 million eligible homeowners refinance or modify their mortgage loans.

Among the criteria for those seeking a modification under the program: they must be an
owner-occupant of a one to four-unit property; the loan was originated on or before Jan. 1,
2009 and has an unpaid principle balance of no more than $729,750 for one unit properties
(higher limits apply to multiple units); the mortgage payment exceeds 31 percent of gross
monthly income; and the payment is not affordable because of a change in income or
expenses.

A good first step is to contact a foreclosure avoidance counselor through the U.S.
Department of Housing and Urban Development who can provide free assistance on your
mortgage options. You can find a list of HUD-certified housing counselors at
www.makinghomeaffordable.gov, www.hud.gov and through the non-profit Homeownership Preservation Foundation at www.995HOPE.org or by phone at 1-888-995-HOPE.

A new Illinois law signed this spring by Gov. Pat Quinn also gives troubled Illinois homeowners facing foreclosure up to a 90-day grace period to work with lenders and housing counselors to avoid foreclosure.

If you do plan on seeking a mortgage modification, go into it prepared with documentation of your current financial situation, assets and account balances. The Making Home Affordable program also requires that you have a letter describing why your mortgage is now unaffordable.

If you are a homeowner in trouble, one thing you don’t want to do is fall victim to
mortgage modification or foreclosure “rescue” scams that could cost you money and quite
possibly your home.

Some common scams include:
• Foreclosure “rescue” scams in which someone offers to act as an intermediary between you and your lender. You are told to pay your mortgage payments directly to the scam artist, who then pockets them rather than forwarding the money on to your lender.
• Fake government modification programs that ask you to pay high, up-front fees to participate in what they claim are government-supported modification programs. Legitimate government programs do not require payment.
• Rent-to-buy scams in which you transfer the title of your home to the scam artist, who promises to pay off the loan and then rent the home back to you, with the possibility of you buying the home back later. If you can’t meet the terms - which often include high monthly payments - you are forced out.

For more information on foreclosure options or to report fraud, go to Illinois Attorney General Lisa Madigan’s Homeowners Helpline at 1-866-544-7151 or www.illinoisattorneygeneral.gov. Another resource is Illinois Legal Aid at www.illinoislegalaid.org.

“There are legitimate programs and resources in place to assist homeowners who are
struggling to keep their homes, so they don’t have to feel like they are in this alone,” said
Long. “Another good source of information on avoiding foreclosure is www.YourIllinoisHome.com, a consumer site developed by the Illinois Association of REALTORS.”

The Capital Area Association of REALTORS® is the Voice for Real Estate in the Capital Area representing more than 700 members involved in all aspects of the real estate industry. The Capital Area’s Resource for Real Estate Information can be found at www.SeeHouses.com.

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