If you are having trouble making your mortgage payment, there is a lot of help out there, but you have to be proactive about getting it! This is a quick summary of some of the best advice we have seen on the internet. We urge you to take control and responsibility of the situation, as that is your best chance of saving your house.
#1 - REALIZE YOU HAVE A PROBLEM - You first need to realize that you have a cash-flow problem that needs to be fixed. The earlier you realize this the better. Common problems are job-loss, a debilitating injury or illness to a family member, or a mortgage rate reset to a much higher rate after an initial "teaser" rate. Know that whatever your situation, you are no alone -- there are thousands of other households in a very similar situation.
#2 - GET MORTGAGE DETAILS - You should already have this stored in a safe place. If not, you need to contact your mortgage servicer to get the details of your loan. Data you will need include: monthly payment (current and what will be after reset), interest rate (both before and after reset), amount owed on the mortgage, and any prepayment penalties. You will also want to know the legal ramifications and time table of events that will take place if you do not make payments or limited payments.
#3 - GET PERSONAL PAPERWORK TOGETHER - If you can not afford your current mortgage payment, figure out what is the most you can afford. Loan servicers will want verification of your current situation and how it has changed. Pay-stubs and accounts of monthly payment outflows will be needed. In addition, you should show how you are making personal sacrifices. This would include selling other assets, cutting down on monthly credit card expenses, cable TV, memberships, entertainment, taking a second job, etc. Generally, loan servicers will be much more willing to consider a temporary adjustment, than a permanent one. So if it is a jobless, estimate how long it will take you to find a job that would allow you to go back to full payment. For a long-term illness or rate reset that simply can not be paid, a refinance or loan modification will likely be necessary. Overall, the key is to show that you want to stay in your house, you are willing to make sacrifices to pay as much as possible, and you are organized and logical in making your case.
#4 - CONTACT A HUD-APPROVED HOUSING COUNSELOR - The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. They’ll help you understand the law and your options, organize your finances and represent you in negotiations with your lender if assistance is required. Note that this is very cheap option compared to many of the pay-services that are available on the internet. Here is the link to find a HUD-approved housing counselor: http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
#5 - CONTACT A MORTGAGE BROKER - Contact a mortgage broker to see if, and what kind, of loan you could qualify for in a refinance. You may find that doing a refinance could solve a lot of your problem. In addition, it will give you a good idea of the going rate right now when you negotiate with your lender. A great place to find the most competitive mortgage rate is bankrate.com, where you can search by product for the cheapest quoted mortgage. We would even recommend calling the 2-3 lowest rates, as a lot of times, different brokers have access to different providers. And your particular situation may result in one firm having a cheaper rate specifically for you.
#6 - CONTACT YOUR LOAN SERVICER - This should be your last step, after you try to reduce your expenses and refinance your current loan, but realize you still can't make full payments. You want to contact the Loss Mitigation group of your loan servicer. The number should be on your monthly statement. We also have this list of phone numbers for the Loss Mitigation group of the largest loan servicers in the country. Some individuals have reported the Loss Mitigation groups being extremely helpful and willing to work towards modifying the loan, while others have indicated it has been very difficult to get even a call-back, let alone concession. The problem can be significantly compounded if there is a second mortgage, HELOC, or Home Equity Loan on the property from a different lender, as all may have to come to agreement. This is especially true if trying to do a short-sales (see house for less than debt on the house). But, the best chance you have with the loss mitigation group is if you show you are committed to doing everything you can to stay in your house, you are willing to make sacrifices to pay as much as possible, and you are organized and logical in making your case. There are numerous reports in the media of struggling homeowners having trouble reaching, let alone actually progress, with someone who can help at their servicer. One suggestion is to make what is called a "qualified written request" under Section 6 of the Real Estate Settlement Procedures Act (RESPA). Under section 6 of Respa, servicers are required to acknowledge any request within 20 business days and must try to resolve the issue within 60 business days. A sample letter can be found on HUD.
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Posted by: AvaCantu27 | September 18, 2010 at 07:34 AM
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Posted by: Maximillian | January 31, 2012 at 02:06 AM