Avoiding Default and Foreclosure
If you have fallen behind on your payments, consider discussing the following
foreclosure prevention options with your loan servicer:
Reinstatement: You pay the loan servicer the entire past-due amount, plus any
late fees or penalties, by a date you both agree to. This option may be appropriate
if your problem paying your mortgage is temporary.
Repayment plan: Your servicer gives you a fixed amount of time to repay the amount
you are behind by adding a portion of what is past due to your regular payment. This
Â option may be appropriate if youâ€™ve missed only a small number of payments.
Forbearance: Your mortgage payments are reduced or suspended for a period you and your
servicer agree to. At the end of that time, you resume making your regular payments
as well as a lump sum payment or additional partial payments for a number of months to
bring the loan current. Forbearance may be an option if your income is reduced temporarily
(for example, you are on disability leave from a job, and you expect to go back to your
full time position shortly). Forbearance isnâ€™t going to help you if youâ€™re in a home you
Loan modification: You and your loan servicer agree to permanently change one or more of
the terms of the mortgage contract to make your payments more manageable for you. Modifications
can include lowering the interest rate, extending the term of the loan, or adding missed payments
to the loan balance. A loan modification may be necessary if you are facing a long-term reduction in your income.
Before you ask for forbearance or a loan modification, be prepared to show that you are making
a good-faith effort to pay your mortgage. For example, if you can show that youâ€™ve reduced other
expenses, your loan servicer may be more likely to negotiate with you.
Selling your home: Depending on the real estate market in your area, selling your home may provide
the funds you need to pay off your current mortgage debt in full.
Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort
because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for
10 years, and can make it difficult to obtain credit, buy another home, get life insurance, or
sometimes, even get a job. Still, it is a legal procedure that can offer a fresh start for people
who canâ€™t satisfy their debts.
CONTACT ME VIA EMAIL, AND TELL ME WHAT YOUR PROBLEM IS, AND I WILL WORK WITH YOU ON GETTING YOUR PROBLEM RESOLVED. THERE'S ENOUGH INFORMATION OUT THERE TO MAKEÂ ANYBODY'S HEAD SPIN, BUT YOU CAN MAKE THE RIGHT CHOICE IF YOU CONSULT WITH A PROFESSIONAL THAT UNDERSTANDS BANK PROCESSES. THERE ARE SEVERAL ASPECTS OF YOUR FINANCIAL PICTURE THATÂ YOUÂ NEED TO LOOK AT BEFORE ANYTHING IS DONE. CONFIDENTLY CONTACT ME IF YOU HAVE ANY DOUBTS.