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Have loan problems? Free guidance available

Free, unbiased counseling is available to homeowners with mortgage problems in the Northern San Joaquin Valley.

The U.S. Department of Housing and Urban Development funds and certifies counseling services offered by several organizations in Stanislaus, San Joaquin and Merced counties.

These nonprofit groups offer help in person, by phone, online, through workshops and in various languages on assorted housing issues.

The groups sometimes can help homeowners renegotiate their loans to lower payments. They can suggest better ways for families to budget funds and manage debt.

"People need to get help from third-party agencies like ours. We're looking out for consumers," said Martha Lucey, executive vice president of ByDesign Financial Solutions' Consumer Credit Counseling Service of Mid-Counties, which has offices in Modesto, Merced and Stockton.

"We are family budget experts," Lucey said. "We offer the hard advice, and that's sometimes what people need to hear to to get out of trouble."

HUD-certified agencies don't sell mortgages or buy houses or collect referral fees or commissions.

"We offer neutral counseling, and we don't have a financial interest in the transaction," explained Martin Eichner, director of HUD counseling programs for Project Sentinel, which has a Modesto office.

Homeowners facing foreclosure too often are targeted by con artists, Eichner warned.

"No matter how desperate you are, you must avoid those so-called foreclosure rescue plans. They're almost always scams, and they leave you worse off than you were when you started," Eichner said. "There are no knights in shining armor who will rescue you, no matter what they say."

Here's some general advice counseling services offer homeowners who are struggling to pay mortgages:

ACT FAST — If you miss mortgage loan payments, lenders can foreclosure on your property. So take quick action if you get a warning letter or notice of default from your lender.

Immediately contact your lender and explain your situation. Be prepared to provide information about your income and expenses.

Contact a HUD counseling agency as soon as possible. If the agency has time to talk to lenders, counselors may be able to renegotiate your loan.

CONSIDER OPTIONS — To avoid foreclosure, you may be able to refinance your loan, get a special forbearance or repayment plan, modify your current mortgage, sell your home, or transfer ownership through a deed-in-lieu of foreclosure.

BEWARE SCAMS — Don't sign any papers you don't fully understand.

Be wary if someone suggests you sign your house over to him so he can catch up the payments and continue paying the mortgage while you pay him rent.

In this common scam, the person usually tells you he will resell the house to you once your financial situation improves.

But usually you never get your house back, and often you get evicted and may be held liable to repay the mortgage.

SEEK EXPERT HELP — Don't simply trust the advice of family members, friends or associates, because they may not understand the laws or all options.

They may have hidden agendas or a financial stake in your decision.

Get independent, expert advice instead.

BUDGET WISELY — Before refinancing or getting an additional loan, establish a budget to determine what size payment you can afford.

Just because a lender says you qualify for a certain loan amount doesn't mean you can afford it.

READ EVERYTHING — Don't sign anything you don't read and thoroughly understand.

Ask for explanations if you have any questions, and don't let anyone pressure you into signing anything you don't understand.

Don't sign blank forms or documents that aren't completely filled out.

To comment, click on the link with this story at Bee staff writer J.N. Sbranti can be reached at 578-2196 or