With all the talk of loan modification, it's tempting to try to get in on the action if your payment is too high. You've heard that a lot of programs are more willing to help people who are behind, so you think it might be a great idea if you skip a payment or two.
In reality, this is risky business - and, unless you really can't make the payment, unnecessary. In the past, private lenders who were wiling to work with borrowers would not start talking until the homeowner was delinquent. Following the lead of the Federal Making Home Affordable program, many lenders will now help borrowers if they having trouble making the payment, not just because they are delinquent.
You only have to show that you are at risk of imminent default. If your mortgage has skyrocketed to an unaffordable level or you anticipate it will, if your income has changed or will, or you are undergoing some other hardship that will make it hard to make the payment, your lender may help you rather than letting your home fall into foreclosure. In this case, you will have to provide evidence of the hardship or change in circumstance.
If you decide to take matters into your own hands and skip payments, the lender might not take it lightly if you appear to have the means to pay. Among other things, they will pile on the late fees and penalties. Extra charges can pile up quickly!
Delinquency will disqualify you for refinancing through the Federal program and many lender-based programs. Late payments also affect your credit score, especially if they are recent. You might find it harder to get credit when you need it and, in the current era when credit issuers are slashing credit lines as a preventative measure, you might find yourself with less credit flexibility now. Some of this may change with recently-passed credit card changes but most of the new rules will not be effective until 2010.
Skipping a payment could backfire and cause you unplanned trouble, but regardless of your particular circumstance, there is plenty of housing counseling available to offer direction about how to make it in this tough economy. Avoid scammers who promise debt relief and mortgage reduction who can make your problem worse instead of better. Seek help from Colorado Foreclosure Hotline right here in Denver or call (888) 995-HOPE (www.995hope.org). Even if you have gone to the government site and don't think you qualify, check with these reputable counselors or your lender directly to try to work out something. Also, as I am a Certified Distress Property expert (CDPE), please feel free to give me a call at 888-892-2599 or check out our DenverAvoidForeclosure website.
If you are interested in selling your home on short sale or in buying bank owned properties in the Denver area, Bandy Homes has the experience and patience to work through the process with you.
Marianne Bandy
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