Knowledge Is Power. Know your options.

Knowledge is Power.  Know and understand your options.

 

Have you missed mortgage payments, or see a missed payment coming up in the future?  If you are not opening the mail remains or not answering phone messages, time will still pass and you won’t be able to turn the calendar back when you finally have the mental strength to make your phone call for help.   If you are receiving notices from your bank about the mortgage, ask someone to help you open those envelopes if you are unable to.     

Take a few minutes to look at the options that are available when homeowners have missed payments.   You can also go to http://www.makinghomeaffordable.com/eligibility.html   for the Home Affordable Government website for available programs such as the Home Affordable Refinance Program, Modification (HAMP) and others which I will post about at a later date.

 

Option 1- Reinstatement- Bring the loan current.

If the reasons for missing your payments were temporary, you have the option to reinstate your mortgage.  You must pay all of the missed payments, plus all interest, late and legal fees, and penalties.

 

Option 2- Forebearance Plan-  A Temporary Plan

A payment plan or forebearance  plan can be arranged if the reasons for missing payments were temporary but are unable to make one large payment.  Arrangements are made with the lender to pay the past due amount in divided payments in addition to your monthly mortgage.   They may also apply the missed the payments to the end of the scheduled loan amortization.

 

Option 3- Refinance- New loan with reduction in payments.

To refinance, there must be enough equity in the home and be able to appraise for the refinance amount.  You also must have verifiable income and credit to qualify for the loan.  See government sponsored refinance program.

Option 4:  Loan Modification - Modify original loan terms.

Your lender lowers the interest rate on the current loan in order for you to afford the payments.  The lender can also lower the principal balance of the loan for affordable payments.  You will send in proof  of income and expenses, tax returns and possibly a letter from you to explain your request for a loan modification.

Option 5:  Sell the property- Use the equity to pay off or pay the difference.

Option 6: Rent the property- Make the loan current.

Option 7: Short Sale- Negotiate with bank to accept sale under loan amount.

Option 8: Deed In Lieu of Foreclosure (DIL): “friendly foreclosure”

If there is one lender and no other liens, the bank can take the deed back in exchange for the property.  This saves the bank time and money on the foreclosure process. 

Option 9: Bankruptcy:  will stall foreclosure but will not prevent it.

Get referrals for a “Bankruptcy” attorney to consult