Mortgage companies say that the last thing they want to do is foreclose, because seizing a delinquent borrower's house costs money. The key to keeping your house is to make it less expensive for the lender to work with you than to foreclose. How does one go about working out a plan to keep their home? When you fall behind on payments, your chances of getting cooperation from the mortgage servicer are better if you follow these guidelines:
*Respond to the Mortgage Company's Calls and Letters. No contact gives a bad impression.
*Seek Advice and Negotiating Help from a Third Party. Don't feel rushed to agree with whatever terms the mortgage company may offer that you may not be able to afford. Speak with an attorney, an accountant, or a knowlegeable mortgage person and describe in detail your situation. A good advisor may serve as an intermediary to the lender.
*Figure out if your problem is short-term or long-term. Prioritize your debts.
*Decide what you want and ask for it. Explore loan workout solutions. Reinstatement: Your lender is willing to discuss accepting the total amount owed by a specific date. They will often combine this option with a Forbearance.
Forbearance: The lender may allow you to reduce or suspend payments for a short period of time after which another option must be agreed upon to bring your loan current. A forbearance option is often combined with a Reinstatement when you know you will have enough money to bring the account current at a specific time in the future. The money might come from a hiring bonus,investment, insurance settlement, or a tax refund.
Repayment Plan: You may be able to get an agreement to resume making your regular monthly payments, in addition to a portion of the past due payments each month until you are caught up.
If it appears that your situatuion is long-term or will permanently affect your ability to bring your account current, you may have an option for Mortgage Modification by adding the missing payment to the existing loan balance, changing the interest rate including making an adjustable rate into a fixed rate, or extending the number of years you have to repay the loan.
If your mortgage is insured, you may qualify for an interest-free loan from your mortgage grantor to bring your account current. The repayment of this loan may be delayed for several years.
*Be aware of Predatory Lending Schemes.
-Equity Skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed & move out.
-Phony Counseling Agencies: they offer counseling for a fee when it is often given at no charge. Do not sign anything that you do not understand. It is your right and duty to ask questions and have your paperwork verified by another person such as an attorney before signing.
*Document all of your income and expenses.
*Keep all correspondence with your mortgage company. Write down dates and with whom you spoke with for your records.
*Be persistent in your quest to talk to the right people at your mortgage company. If keeping your home is not an option, - call your lender.
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