With the economy in the shape it is, a lot of people need help in obtaining a loan modification or pursing other steps to avoid foreclosure. But while there are a variety of resources to help at-risk borrowers with their mortgages and hold on to their homes, many of them are too intimidated to take advantage of them.

With the economy in the shape it is, a lot of people need help in obtaining a loan modification or pursing other steps to avoid foreclosure. But while there are a variety of resources to help at-risk borrowers with their mortgages and hold on to their homes, many of them are too intimidated to take advantage of them.

According to Consumer Credit Counseling Services of Atlanta, an affiliate of one of the nation's largest nonprofit credit counseling agencies, many borrowers who need help with their mortgages don't seek it because they're uncertain how to proceed or just too intimidated by the process.

"Fear often prevents many consumers from seeking help," said Michelle Jones, senior vice president of counseling for CCCS of Greater Atlanta, Inc. "Overcoming these fears can mean the difference between staying in your home and losing it."

The agency cites six primary issues that can prevent homeowners from seeking help when they are at risk of losing their home to foreclosure. They are:

Accelerated foreclosure

Some borrowers are concerned that if they let their mortgage company know they're having financial problems, the lender will simply act faster to put them in foreclosure. But in reality, lenders don't want to foreclose unless they have to - it costs them money. Letting your lender know as soon as possible that you're in financial difficulty can provide them more time to help you work out a solution, as well as allowing you to work out a repayment plan or loan modification before you've fallen too far behind on your loan.

Embarrassment

At-risk homeowners may be embarrassed to admit they're in financial difficulty and need help. However, in the current economy, lots of people are struggling to get by. Most people already have multiple friends and family members who are either unemployed or facing foreclosure themselves. It's not an uncommon situation these days or one that carries much of a stigma right now.

Toughing it out

Some borrowers think they're better off doing every possible to manage the situation themselves before seeking assistance. Often, homeowners in financial trouble may end up draining their savings account, selling stock they inherited or tapping into their IRA or 401(k) account before they even think of contacting a credit counselor or applying for a loan modification. But once their financial reserves are drained, they have far less room to maneuver, making it that much harder for them to work out a successful modification or repayment program.

Hopelessness

Sometimes, they think nothing can be done. Many homeowners believe that once you can't keep up with your mortgage payments, that's it. End of the story. What they don't realize, however, is that there may be options that never occurred to them and that they won't know about unless they seek help, either from their lender or a certified credit counselor.

Fear of fraud

Many people are afraid of getting scammed. With all the news reports and government warnings about rip-off artists who charge huge fees for "foreclosure rescue" or loan modification services, it's no wonder that many at-risk borrowers are leery of seeking help. However, there are many nonprofit agencies, certified by the Department of Housing and Urban Development (HUD), with trained credit counselors who know the ins and outs of the mortgage business and loan renegotiation, whose services are available for minimal fees.

It's too late

One they've already been rejected by their lender for a loan modification, homeoweners may think there's nothing more they can do. However, there may still be other options available or the application could be modified to help the borrower to qualify for a loan modification under the standards of the government's Making Home Affordable program.

The key thing for any homeowner at risk of foreclosure is to seek help before it's too late, preferably before the situation becomes dire.

Published on May 28, 2011