Often times when homeowners get behind on payments to their mortgage lender the easy thing to do is ignore it until it gets worse. The truth is that the sooner you address your monthly payments and whether or not they are affordable, the faster you can get on track and avoid the foreclosure process all together. More and more lenders are willing to work with you, and would prefer to restructure or modify your loan as opposed to letting the you struggle before eventually moving to foreclosure proceedings and taking over ownership of the property.
Under the Obama administration, many mortgage companies and banks have been incentivized to work with struggling borrowers and allow enough time to delay foreclosure and provide loan modification. Depending on your credit, your mortgage company may be willing to accept a lower interest rate for 12-24 months driving your monthly payments down. Or they may allow you to tack on the missed payment portion to the back side of the loan, thus enabling you some time to get caught up and at least stay in the property.
You have several options that are typically better than accepting the foreclosure which can be a detriment to your credit score and prohibit you from being a qualified borrower for future home purchasing. One of these options is selling the property. Because the housing market is flooded with homes for sale in most regions, your property will most likely need to be priced competitively to get the attention of buyers and investors. If you have a property in a strong location that is close to public transportation it will be a plus, and is also good criteria to consider when purchasing your next home as well. It is often times a good idea to consult with a trusted realtor to get an idea of what your property can sell for on the open market.
If you don’t have time to wait for offers, or the bank is breathing down your neck for missed payments by threatening foreclosure, the next best step is to contact your lender directly and inquire about possible loan modification. They should be able to tell you what options are available. Let them know that you want to get back on track and pay the debt owed to them, but are having a hard time keeping up and simply need time to pay the past due amount.
You can also contact a number of foreclosure help services – some come better recommended than others, and you want to confirm that you do not have to pay any money up front unless the company is guaranteeing a service in return. It will be unreasonable to expect that they will fix everything for free, but they should be able to assess the situation and explain what possible options are available. If you just want out of the property and have had enough with your mortgage company, you can look into selling the home to one of the thousands of investors that are looking for competitively priced properties in various regional markets around the United States.