When you get behind on mortgage payments, foreclosure can come quickly. Your mortgage Company will call you from the first month you are late. They will not automatically put you in a program to help avoiding foreclosure or help you bring your mortgage current. Lenders are not in business to foreclose, but they will do everything possible to get the money.
As mentioned above, Mortgage Companies do not want foreclosures, so they are usually open to work out plans. These plans are negotiable and it is to your advantage to develop a plan that works best for you before you contact the lender.
You must make contact with your lender. Most people are afraid to contact the lender. Being in foreclosure or on the verge of being in foreclosure can be embarrassing or intimidating to the typical homeowner. However, knowledge and communication is critical. Conquer this fear ,while making the lender comfortable knowing they have a homeowner who wants to keep their house.
The next step is to write a letter explaining why you fell behind on your payments. It could be as simple as an interest rate adjusting and increasing your payment. It could be a medical issue or loss of income. Remember, bad things happen to good people, and explain your situation in the most professional manner possible. The lenders refer to this as a "hardship" letter. This letter will help set the groundwork for working out a solution.
You must document your financial situation. Painting a clear picture of your ability to repay your "new" loan is essential. There are no simple formulas for determining how much you can afford. Every homeowner is different.
Most lenders have numerous options for us to choose from. They include loan modification, deferment, forbearance, and a repayment plan. Ask about the Hope Loan through FHA, A Loan Modification will change your existing mortgage note and give you a fresh new start in managing your home. Your account will be brought up to date immediately. You will no longer have the lender calling asking you to pay fees and charges that you simply can not afford.
Federal legislation allows homeowners who negotiate loan modifications with lenders to escape income-tax liability for the amount forgiven. This will not only help to give you a lower monthly payment which you can afford, but will also help you pay off your home sooner than before.