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Buyers and Sellers

Avoiding Foreclosure

The Greater Fort Worth Association of REALTORS® knows how devastating foreclosures can be on homeowners. Foreclosures can significantly affect a person's ability to qualify for credit in the future and should be avoided at all costs.

When foreclosure looms, there are steps that can be taken to avoid it.

What should I do?

  • Do not ignore the letters from your lender. If you are having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help.
  • Stay in your home for now. You may not qualify for assistance if you abandon your property.
  • Contact a HUD-approved housing counseling agency. Call 1-800-569-4287 or TDD 1-800-877-8339 for the housing counseling agency nearest you. These agencies are valuable resources. They frequently have information on services and programs offered by Government agencies as well as private and community organizations that could help you. The housing counseling agency also may offer credit counseling. These services are usually free of charge.
  • What are my alternatives?

You may be considered for the following:

Special Forbearance
Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses. You must furnish information to your lender to show that you would be able to meet the requirements of the new payment plan.

Mortgage Modification
You may be able to refinance the debt and / or extend the term of your mortgage loan. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem and can afford the new payment amount.

Partial Claim
Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current. You may qualify if:

  • your loan is at least four months delinquent but no more than 12 months delinquent
  • you are able to begin making full mortgage payments

When your lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay your lender the amount necessary to bring your mortgage current. You must execute a Promissory Note, and a Lien will be placed on your property until the Promissory Note is paid in full. The Promissory Note is interest-free and is due when you pay off the first mortgage or when you sell the property.

Pre-foreclosure Sale
This will allow you to avoid foreclosure by selling your property for an amount less than the amount necessary to pay off your mortgage loan. You may qualify if:

  • the loan is at least two months delinquent
  • you are able to sell your house within three to five months
  • a new appraisal shows that the value of your home meets HUD program guidelines

Deed-in-lieu of Foreclosure
As a last resort, you may be able to voluntarily "give back" your property to the lender. This won't save your house, but it is not as damaging to your credit rating as a foreclosure. You may qualify if:

  • you are in default and don't qualify for any of the other options
  • your attempts at selling the house before foreclosure were unsuccessful
  • you don't have another FHA mortgage in default

This information was provided by the U.S. Department of Housing and Urban Development.

Tips to Avoid Foreclosure

Other Foreclosure Related Information (HUD)

What do I need to bring to a loss mitigation counseling session?

Loss Mitigation – Literally means to reduce loss. For the foreclosure process, it is the lender's attempt to recoup as much of the loan value as possible.

  • Copies of any and all correspondence received from loan servicer.
  • Copies of most recent check stubs or other indicator of income.
  • Copies of last four bank statements (checking and savings) for self-employed.
  • Copies of recent budget or financial statement.
  • Letter of hardship / explanation of why delinquency has occurred.
  • Authorization letter or form allowing 3rd party communication.

HUD Approved Counseling Agencies in Tarrant County

These housing counseling agencies are free of charge.

CCCS of Fort Worth
2100 N. Main St., Ste. 224
Fort Worth, TX 76106

City of Fort Worth Housing Department
1000 Throckmorton St.
Fort Worth, TX 76102

Debt Education and Certification Foundation
114 Goliad Street
Benbrook, TX 76126

Housing Opportunities of Fort Worth
1065 West Magnolia, Ste. B
Fort Worth, TX 76104
This email address is being protected from spambots. You need JavaScript enabled to view it.

Tarrant County Housing Partnership, Inc.
3204 Collinsworth
Fort Worth, TX 76107

Other Housing Counseling Opportunities

Hope Now Alliance – Includes a number of counseling organizations, which consists of all HUD intermediaries that have offices across the United States. All counselors affiliated with the Hope Now Alliance are HUD certified and services are free of charge.

1-888-995-HOPE or