Foreclosure is the process by which a lender takes possession of a home on which they have a lien, usually as a result of non-payment by the borrower.
Foreclosure can be a difficult and traumatic event. While you may feel overwhelmed, there are some things you can do.
- You should always contact your lender whenever you are not going to make your payment on time. Don't be embarrassed. Everyone experiences tough financial circumstances and lenders are aware of this. Explain to your lender what's happening that's keeping you from making your payment. Be prepared to provide evidence of your financial situation. If it's a medical issue that's keeping you from working, bring a note from your doctor. If you've been layed off from work, bring your lay off notification or unemployment compensation notification. Be honest and cooperartive with your lender and the odds are good that they will try to work with you.
- Talk to your lender about a possible extension. An extension is when you pay the interest due on your loan and in exchange, the lender advances your due date one month. Many lenders have policies about the number of extensions they permit, but often just a single month's reprieve can get you through financial difficulty.
- See if your lender is willing to refinance your mortgage to reduce your monthly payments. This may result in a higher interest rate, especially if your credit quality has declined, but a lower monthly payment can be the difference between keeping your home and losing it.
- Ask your lender if they can review your monthly income and expenses and help you find ways to save money. Sometimes, a new set of eyes can provide you with a new perspective. Here's what we have advised members in the past: Reduce or eliminate your cable tv service, stop smoking, eat out less, cancel gym memberships and dvd rental clubs, sell your car and trade down to something less expensive, get a part-time job, eliminate either your land line or your cell phone. None of these is fun, but if you're serious about reducing expenses, your lender will take you seriously.
- You can contact a HUD approved non-profit counseling agency for assistance. Here are some of the agencies in Maine:
Community Concepts, Inc. (Androscoggin and Oxford Counties) 333-6418 or 333-6413
Aroostook Community Action Program, Inc. 764-3023
Coastal Enterprises, Inc. (Statewide) 882-7552
Consumer Credit Counseling Services (CCCS) of Maine (Statewide)
Kennebec Valley Community Action Program (Kennebec and Somerset Counties) 859-1637
MaineStream Finance (Penobscot, Piscataquis, Knox, and Waldo Counties)
Washington-Hancock Community Action Program 546-7544
York County Community Action 459-2967 or 324-5762
Establishing and Maintaining Good Credit
While the existence of late payments with creditors is a strong indicator of poor credit performance, the absence of late payments doesn't necessarily mean that you have perfect credit. Making timely payments is very important to establishing good credit but is not the only factor that is measured. Perfect or excellent credit history is built over time. Consistent, intelligent use of credit over several years is the best indicator of credit performance.
Creditors look at the average age of your credit accounts. The longer you have had credit accounts, the better your credit rating will be. Older accounts earn a more favorable rating than newer accounts do. Excessive requests for credit can hurt your credit rating. So keep this in mind when you send in your application for that new credit card offer. Creditors monitor the relationship between your credit account balances and the limits. So if you are close to those limits, or over the limit, this could negatively affect your rating. If you have a high amount of revolving or credit card debt, even if you make your minimum payments on time, you could be denied credit.
Keep in mind that your credit rating could change from day to day. It is based upon your credit activity. Payments, new credit accounts, credit use and balances are monitored periodically. If you control the use of your credit accounts, your rating should remain stable. However, adding balances, taking on new credit cards and keeping high balances on your existing cards could have an effect on your credit rating.
Many lenders are establishing interest rates on loans based upon credit rating. Members who control their spending and use credit wisely, are rewarded with lower rates. Members who have minor credit glitches or high credit card balances, may still be approved for a loan. The higher rate they pay is relative to the higher level of risk they pose as determined by their credit history. One rate does not fit all in today's economy.
While it is a good move to establish credit history, taking on credit that you don't need is not a good idea. If you take on too much debt and can't repay it, you will damage your credit and won't be able to get a loan for something you do need, like a car or a home. Every time you send in a pre-approved offer, a credit report is pulled. Too many credit inquiries can negatively impact your credit rating. One or two small credit cards are all anyone needs. If you want to build your credit, establish a savings account and deposit a set amount to it each week or month. Think of it as making a loan payment. If you can easily do this for a period of time, you will know that you can afford a payment and you will build your savings. Use that savings as collateral for your first loan and get a lower rate than on those credit card offers!
Order a copy of your credit report on an annual basis. Review it for errors and activity. Make sure all the activity matches what you have done over the past year. If errors are found, dispute them with the credit-reporting agency. Remember that good credit comes from using credit wisely over a long period of time.
Stuff happens. Okay, that's not the official saying, but we can't put that on our website. The fact of the matter is that stuff does happen. Sometimes, unpleasant stuff, such as losing your job, a medical condition that requires you to be out of work for a time, or the death of a spouse. If you have loans with the credit union and encounter one of life's bumpier roads, please contact us and let us know what is happening with you. There's no need to be embarrassed. We may be able to help with an extension or by rewriting your loan for lower payments. If you stay in touch and work with us, we'll work with you. If you ignore our attempts to contact you, then you leave us with the impression that you don't care about paying us. So pick up the phone or stop by and talk to us. We're your credit union and we want to help.
No Hats, No Hoods, No Sunglasses - Based on advice from law enforcement, most of Maine's credit unions have implemented a 'No Hats, No Hoods, No Sunglasses' policy. We ask that you remove all hats, hoods and sunglasses before entering the lobby so our employees and other members won't immediately become suspicious about your presence in the credit union. You watch the news and have noticed that a vast number of robbers wear a baseball cap, sunglasses and a hood! We're just trying to protect our members and employees, not inconvenience you or make you feel like a criminal. So, please, show us the consideration of removing these items upon entering the lobby. Thank you very much!
Elder Financial Abuse. It's sad, but estimates are millions of seniors are victimized by financial abuse each year. Financial abuse is when someone uses another person's money without consent. The most frequent type of elder abuse is perpretrated by a family member who uses the resources of an elderly relative for their own benefit. Signs of elder financial abuse include unpaid bills, missing valuables, comments from the elderly person and isolation. If you are or know a victim of elder financial abuse, you can call the Elder Abuse Hotline of the Department of Health and Human Services Adult Protective Services Division at
If you're expecting Social Security benefits to be enough to provide for you in retirement, think again. People under the age of 50 need to be focused on providing for themselves. By contributing $4,000 per year to an IRA earning just 5.00% from age 25 to age 65, you'll have more than $500,000 for your retirement. We offer IRA options that allow you to open an account with as little as $25 and make deposits in any amount. Try using direct deposit to transfer $25 each week directly into your IRA and start counting the days until retirement!
If you change your name, inform the Social Security Administration before you file your next tax return. The name on your tax return must match the name registered with SSA. Those who encounter problems are usually women who take their husband's last name or revert to their previous name after a divorce. Just complete form SS-5 at your local SSA office to avoid delays or complications with the IRS. Our local SSA office is located at 600 Turner Street, Suite 5, in Auburn. The local number is 784-9652. You can also obtain this form at http://www.socialsecurity.gov.
If you are planning to make a large purchase over the Internet or via phone order using your debit card, you may want to call Card Services to ensure your daily limit is high enough to authorize the purchase. If we can verify you to our satisfaction, we can raise your limit temporarily to allow the purchase to be authorized.
You should test your debit and credit cards just before going on vacation by performing a transaction. If you are planning to travel out of the State or Country, please inform Card Services of your itinerary. Making us aware of your travels helps us prevent our fraud services from blocking your card due to unusual activity.