HELP! I CAN’T MAKE MY MORTGAGE PAYMENT

Every day thousands of people like you have trouble making their next mortgage payment. Though things may seem hopeless, help is available. You just need to take the first step! If you ignore the problem, you may lose your home to foreclosure, possibly affecting your ability to qualify for credit or to rent another home.

WHAT SHOULD I DO?

  1. Call your lender right away. Ask for the Loss Mitigation Department. The lender’s contact number should be on your mortgage statement. When you call, be prepared to explain:
    • Why you are unable to make your payment.
    • Whether the problem is temporary or permanent.
    • Details about your income, expenses, and other assets like cash in the bank.
  2. Open all of the mail you receive from your lender. It contains valuable information about important legal notices. Failing to read the mail will not be an excuse in foreclosure court!
  3. Look for ways to increase the amount you have available to make your mortgage payments. Can you cancel cable TV, pack lunches, or get a part-time job? While these actions may not replace all of your lost income, they send a strong message to your lender that you are serious about keeping your home

WHAT OPTIONS ARE AVAILABLE TO HELP ME KEEP MY HOME?

If you want to keep your home and your income problem is temporary, talk to your lender about alternatives based upon your specific situation. Factors include (among many) who owns your loan, who services your loan, the amount of arrearage, the value of the property and your equity. These are examples of some of the types of assistance available.

Special Forbearance – Your lender may provide for a temporary reduction or suspension of your payments to allow you time to overcome the problem that reduced your income. Then you may be offered a payment plan so you can pay back the missed payments a little at a time until you are caught up.

Mortgage Modification – A modification is a permanent change to your loan through which the overdue payments may be added to your loan balance, the interest rate may be changed, or the number of years you have to pay off the loan may be extended.

Partial Claim – This is a one-time loan from the FHA insurance fund to bring your mortgage current. The loan is interest free and does not need to be repaid until you pay off your first mortgage or sell your house. This option is available only to borrowers with FHA-insured loans. However, if you have a conventional loan, ask your lender if they offer an “advance claim.”

WHAT OPTIONS DO I HAVE IF I CAN’T KEEP MY HOME?

If your income or expenses have changed so much that you are not able to continue paying the mortgage, your best option is to move to more affordable housing.

Most lenders offer workout plans that allow homeowners to transfer ownership to their lender or to a third party for less than full payoff. These options protect you and your family from the consequences of foreclosure.

Pre-foreclosure “short” sale – With your lender’s permission, you can offer your house for sale and sell it at fair market value even if the amount you receive from the sale is less than the amount you owe. If you meet certain conditions, you may be eligible to receive relocation expenses.

Deed-in-lieu of foreclosure – As a last resort, you may be able to return your property to your lender voluntarily. If you leave the property clean and undamaged, you may be eligible to receive relocation expenses.

Be aware that there could be income tax consequences to any plan that reduces the amount of debt you owe, so check with a tax adviser before accepting these workout options.

BEWARE OF SCAMMERS

Scammers targeting homeowners who are struggling. According to the U.S. Department of Housing and Urban Development, these are the SIX RED FLAGS

to indicate you’re dealing with a loan modification scammer.

UPFRONT FEES – Advisers who seek payment in advance usually just take your money and disappear.

BOGUS GUARANTEES – Legitimate HUD-approved counselors promise only that they will try their very best to help you.

REDIRECTED PAYMENTS – Make your mortgage payments only to your lender. Scammers often tell people to pay them instead. They simply take your money and put you even further behind.

MISLEADING DOCUMENTS – Know what you a re signing before you sign it. If you’re pushed to sign something without reading it or understanding it, stop. If you sign, you could be giving away your home.

TMI (TOO MUCH INFORMATION) – Do not share financial information online or over the phone with unknown entities. Provide such data only to your lender or to a HUD-approved counseling agency.

“GOVERNMENT” TAG – Be cautious with anyone claiming to act for the government. To see if you qualify or the various available government programs, just ask your lender or a HUD-approved counselor.