Dos and Don'ts

Dos and Don'ts for Homeowners Facing Foreclosure


  • Sign anything that you do not fully understand. If you are unsure, have all documents reviewed by an attorney, a trusted real estate professional, or a counselor at a HUD-approved housing counseling agency.
  • Deed your property over to anyone. Signing your home over to someone else does not relieve you of your mortgage obligation.
  • Let someone assume the loan without the lender’s permission and without their formally releasing you from liability for the mortgage.
  • Move out of your house because someone promises to make the mortgage payments for you.


  • Be suspicious of anyone who contacts you with a loan or service they promise will solve your money troubles and save your home.
  • Avoid high-pressure lenders, or those who encourage you to pay an upfront fee for any service or loan, borrow more than the value of the home, or take on a loan without considering your ability to make the payments.
  • Get all terms and promises in writing.
  • Be on the lookout for terms that change or are not disclosed at the beginning of the loan process.
  • Avoid any refinancing loan with exorbitant fees, a stiff prepayment penalty, an excessively high interest rate, or a balloon payment due. (If you’re not sure whether the loan you’re being offered includes any of these abusive terms, have someone you trust review them for you.)
  • Check for complaints about any company that offers to buy your home. Contact your state’s consumer protection office or your state’s real estate regulator.

This brochure was created by Consumer Action’s Housing Information Project. © 2007 Consumer Action. Rights Reserved.