A lost job, a death in the family, too many bills piling up - there are many reasons why families today are losing their homes. However, there are many actions you can take to try and save your home before it’s foreclosed on.
The first thing to do is contact your mortgage company! It’s the easiest but sometimes most over look step. Your mortgage company is the first person who can help you stop the foreclosure. When you call customer service, explain to them that you are struggling to make the payments or that you have fallen to far behind to catch up. Many mortgage companies have created special section to deal with all of the foreclosed homes.
There are several options to choose from. A loan modification will make you current and sometimes get you a lower payment. Forbearance will raise your monthly payment for a few years and the extra will go towards catching you up on the months you didn’t pay. You can also ask to have the mortgage stretched over a longer period of time, or have the missing payments strapped to the back of your mortgage. If contacting your mortgage company is the choice for you, make sure that you do what they ask. If they ask for financial statements, mail them the very next day. The longer you drag it out, the more months you will fall behind.
Also, if you are waiting for the mortgage company to contact you, don’t wait more than two weeks. Far too many people go months without hearing anything and then end up with a trial date or foreclosure sale. Loans that are backed by Fannie Mae or Freddie Mac are eligible for the Home Affordability plan. Payments to these mortgages must be less than 38% of your income. Make sure your mortgage company is aware of this so that they can promptly get you a loan modification so that you don’t face foreclosure. If you are having problems working out a solution with your mortgage company, you can use a HUD approved agency to act as the middle person between you and your mortgage company. These agencies can be found at www.hud.gov They are better equipped to deal with foreclosures than homeowners alone.
If you are low income, another resource is your local legal aid. Legal aid may know state specific ways to help you save your home. Some legal aids now offer foreclosure advice to anyone regardless of income. Also, look into what your state is offering for help. In Michigan, you can qualify for the state emergency relief fund which can be used one time to help you catch up on your mortgage. Call different agencies and see what they can do to help you.
The last way to save your home is through bankruptcy. A chapter 13 bankruptcy will put you into a plan payment where you will make payments for 3 to 5 years. The amount you pay will be used to catch you up on your mortgage. You will come out of the bankruptcy current on your mortgage
