What Should I do when I get behind on my Mortgage?

1. Don't ignore the phone calls and letters from your lender. This is the best way to wake up to a knock from the Sheriff telling you to vacate the home. Take this matter very seriously and work to resolve the problem as quickly as possible. Keep track of all correspondence you receive for later reference.

2. Stay in your home. You may not qualify for foreclosure help if the house is vacant. Your home, if proved vacant, can be seized. Stay in your home!

3. Contact a professional to discuss what the best foreclosure solutions are for you. A professional can negotiate on your behalf with the Mortgage Company to get your loan back in good standing. They understand the system, the foreclosure laws and the chain of events necessary to help you keep your home out of foreclosure.

Foreclosure Timeline – Once you become 90 days past due the Mortgage Company will typically issue a NOD (notice of Default). After you receive this notice they will hire an attorney and begin the Foreclosure with the Court system. The Foreclosure must follow a strict procedure laid out by your State laws. Eventually the house will be sold at auction if nothing is done to stop the Foreclosure. The Time line will show the time frames between the NOD and the actual sale date for the property. These time frames are typical and may vary depending on your actual situation.

 What are my options?

1. Reinstatement - Pay the Mortgage Company all of the back payments to bring your mortgage current. This option is rarely attainable. The Mortgage Company will add late fees and Attorney fees on top of your back payments making this amount much more than people are able to come up with.

2. Workout - Negotiate with your Mortgage Company to bring your loan back in good standing. There are many options available to you to get a work out approved. Some examples are as follows:
a. Forbearance - Arrange a payment plan based on your financial situation. This is mostly used in the instance of a tragedy or temporary loss of employment.

b. Loan Modification - You may be able to adjust the terms of the loan to meet your financial situation.

c. Partial Claim - You may qualify to have the repayment amount applied to the end of the current loan and resume normal payments.

3. Refinance - Professionals have established partnerships with very reputable lenders who can give loans on mortgages that are in foreclosure if there is enough equity available.

4. Sell Your Home - You may simply sell your home before the Foreclosure Sale Date. Sometimes the home owner is unable to sell the home outright at the desired sale price and this is not an option. You may be able to negotiate a Short Sale with your Mortgage Company. In this instance the Mortgage Company may take less than what you owe on the loan to avoid a lengthy and costly foreclosure process.

5. Deed-in-lieu of Foreclosure - You can arrange to simply give the home back to the Mortgage Company and walk away with a clean slate.

6. Bankruptcy - This is a last resort. This will only save your home temporarily. If you miss one payment during this process the lender will put you right back into foreclosure. This is like putting a band aid on a bullet wound... you will still need to come up with a permanent repayment solution to get your house payments back on track.

7. Foreclosure - You may elect to allow the home to be entered into mortgage foreclosure. This is the most damaging to you. The Mortgage Company will take your home and all of your equity. If there is no equity they may come after you to pay the shortage or “deficiency”. This is also the most damaging to your credit and your ability to acquire another home loan.

It is important to note that the Workout Options available to you may be limited dependent on the following factors:

1. the type of loan that you have
2. which investor holds your note, and
3. which mortgage insurance company insures your loan (if you carry mortgage insurance on your loan)