I Am Behind on My Mortgage

The phone rings all during the day, through dinner, and up until bed-time. Not only do bill collectors call, but now the bank calls. First, the bank sent a notice stating that I am behind on my mortgage. If I didn’t bring things current, they warned, I could lose my house in foreclosure. I can’t sleep. Instead of counting sheep, the wolf hangs around my front door tacking up notices to vacate. I am borrowing from one credit card to pay another. My family hasn’t seen a doctor or dentist in months. Help! I could lose the house. What options do I have?

I am behind on my mortgage. What options do I have?

• Bring the Loan Current a.k.a. Reinstatement – Believe it or not, your lender wants to work with you to help you get back on track and make your payments. Foreclosure is no picnic for either party involved. And, frankly, both you and your lender lose in the end
• Work Out a “Forbearance Plan” – a forbearance agreement provides short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period and not to initiate a foreclosure during the forbearance period.
• Sell Through a Short Sale – you may be able to sell your home with the bank’s permission before the foreclosure process begins. A pre-foreclosure sale, also known as a short sale, allows homeowners to sell their home at current market value and use that money to satisfy their mortgage [source: Chicago Tribune].
• File for Bankruptcy – Contact a bankruptcy attorney. You need to know your options so you can make informed decisions. How to stop a Springfield foreclosure? Filing for bankruptcy stops a foreclosure proceeding.
• Come up with a Repayment Plan – Repayment options could include a plan to repay missed payments in addition to making monthly payments, especially if there is a temporary hardship
• Explore FHA Programs for Homeowners – Home & Garden writes about the partial claim, a loan modification offered by the U.S. Department of Housing and Urban Development (HUD) for FHA-approved loans [source: HUD]. The FHA provides an interest-free loan to pay off your missed mortgage payments, and it doesn’t need to be paid off until you sell your home or make your last mortgage payment [source: HUD]. There are many programs that offer help to those with floundering financials.

More Help

• A Deed-in-Lieu of Foreclosure – a deed instrument in which the borrower conveys all interest in real property to the mortgagee (i.e., the lender) to satisfy a loan that is in default and avoid foreclosure.  At the height of the housing crisis in 2007-2008, it was called “jingle mail.” Homeowners simply put the house keys in an envelope and mailed them to the bank and then drove away. A deed-in-lieu is a more formal process for jingle mail.

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