Times are not easy for Michigan homeowners, as in the rest of the U.S. thousands of homeowners are facing the possibility of losing their homes to a foreclosure. From January to May 2010 alone, there have been 74,475 foreclosure filings and 9,703 foreclosure sales in Michigan. However, there is hope for those that are willing to fight for their home. Even when a homeowner simply cannot afford their home; there are alternatives to foreclosure if you take advantage of federal and state mortgage help programs.

Michigan foreclosure law has changes in the last two years to adapt to the rise in foreclosures. For instance, since July 5, 2009, state law requires lenders to work with you (and all other troubled borrowers) to avoid a foreclosure. There are also specialized government and non-governmental mortgage aid programs that focus on providing help to Michigan troubled homeowners. These include the Department of Housing and Urban Development section for Michigan, the Michigan Foreclosure Prevention Project, the Michigan Attorney General Office and the Foreclosure Intervention and Neighborhood Stabilization Collaborative.

All of these organizations agree that when your lender starts foreclosure proceedings you must immediately contact a free housing counselor or an attorney. In some cases you might even want both.

A housing counselor will help you understand the foreclosure process in Michigan and provide you with a list of mortgage workouts available to you. They will also help you communicate with your lender and collect all the information you need to negotiate a mortgage workout with your lender. The good news is that housing counselors are free. Contact counselors federally approved by the Housing and Urban Development by calling  800-569-4287 or visit www.HUD.gov. Or visit a state approved counselor by calling 866-946-7492 or visiting www.michigan.gov/mshda.  You can also contact the Michigan Foreclosure Prevention Project (http://miforeclosure.mplp.org), an organization that combines the services of legal aid offices and housing counselors throughout Michigan, as well s the Legal Services of South Central Michigan (LSSCM) and the University of Michigan Law School.

A foreclosure starts a legal process which will end in you losing your home if you don’t take steps to avoid this from happening. Foreclosure and bankruptcy attorneys have experience in dealing with debt problems, and can help you negotiate with lenders. If you cannot afford a lawyer you can find legal aid at www.michbar.org/public_resources/legalaid.cfm. They can provide you with a list of lawyers that do pro bono work (free or for reduced fees) for low income borrowers.

Contacting government and state approved agencies will protect you from so-called foreclosure prevention specialists which are often scam artists that prey on vulnerable borrowers. Remember there is no need to pay for a housing counselor, help is available for free.

Finding a housing counselor and an attorney is only the beginning, to avoid foreclosure you are going to have to contact your lender and negotiate a mortgage workout. Our next article Avoid Foreclosure Michigan: Contact Your Lender and Negotiate will look into further steps Michigan homeowners must take to protect their homes.

If you are a resident in Georgia and are struggling to meet your mortgage payments you are at risk of losing your home. The Georgia Department of Community Affairs provides valuable advice on how to avoid foreclosure and find free help from professional housing counselors.

Every state has different laws on foreclosure process, so it is important to know your state laws. Local housing counselors can provide you with this and other important information. Georgia, for instance, is a nonjudicial state in foreclosure matters. This means that a lender does not have to go to court to start a foreclosure. Nevertheless the borrower must be at least 90 days (three months) behind on his payments. Also, the lender or a representative must advertise the date of the foreclosure for 30 days in a legal publication of your county.

How can housing counselors help?

Knowing what to do is not easy when you are worried you might lose your home. A certified counselor can help you ask for help in the right way to the right people. Counselors have lists of contacts for key people in the main lending companies. These are decision makers that have the authority to negotiate the terms of a mortgage workout. A counseling agency can also help you to write a financial hardship letter asking for a mortgage workout. Just writing this letter and filling legal forms can be a nightmare for some people. Free counseling agencies can help you with this at no cost to you.

Counseling agencies can also help you find out what alternatives you have in your specific circumstances. For instance, if you just lost your job you might be tempted to ignore your mortgage payments until you find a job. However, a housing counseling agency can help you ask your lender to reduce or stop payments until you have a job again. These choices might not be available if you wait too long without either contacting a housing counselor or your lender. Just remember that a housing counselor is paid to have your best interest at heart, and a bank does not.

Can counseling agencies give me funds to help me meet my late payments?

Although the government funding that pays for counseling agencies does not allow them to use these funds to provide direct financial aid, but they can put you in touch with others that can. Talk to your local housing counseling agency and ask what programs (government and private) are available to help you bring a mortgage current or pay for other expenses.

Even if you feel there is no chance of you keeping your home and foreclosure is unavoidable, you should still contact a housing counselor. They can explain to you how the Homeowner Affordability and Stability Plan can help you find alternatives to foreclosure.

Click here for a list of counseling agencies approved by the Georgia Department of Community of affairs or call 1-888-995-4673 to find your closest HUD approved agency.