By Jim Donovan: If you are having trouble paying your monthly mortgage payments, here are some steps to take:
1. Contact your mortgage company as soon as possible and try to negotiate a modification.
Your bank may offer you:
Modification: A permanent change in your interest rate and possibly the term (duration) of your loan.
Forbearance: A temporary reduction in your payment, usually 3 to 6 months. This does not lower your interest rate. Some modification programs, like Making Home Affordable, require a forbearance plan for a few months before your permanent modification is finalized.
Repayment Plan: No change in interest rate or term. Your delinquent payments are spread out over a period of time (usually 12 months or less) and added to your mortgage payment.
If your bank won’t approve you for any of those options, then you might want to consider:
2. Sell the house
If you have equity, consider selling your home.
If you don’t have equity in the home, consider a short sale.
- Keep in mind that a short sale requires your servicer’s approval and can take several months.
- Get the bank involved in the process early and use a realtor experienced in short sales.
3. Deed in Lieu of Foreclosure- This option avoids full foreclosure and must be approved by your servicer.
- Most servicers require that you have had your home listed for sale for at least 3 months and could not find a buyer.
- DIL’s can also take a few months, so get your servicer involved early in the process.
- DIL’s will affect your credit score, but not as negatively as a foreclosure.
4. Foreclosure (continue appeal process)
- If you receive a foreclosure complaint, you have different options depending on where you live.
The process varies in different areas.
- If you’re a resident of Philadelphia, New Jersey or Bucks County and live in your home, you have the option of going through a mediation process.
- A mediator or housing counselor helps you negotiate directly with the servicer to come up with a workable solution.
- If you live in Delaware County, call CCCS within 30 days of your foreclosure complaint at 1-800-989-2227 — you will get another 30 day stay of any foreclosure action. Our housing counselors will prepare a workout proposal to help you stay in your home.
Programs that can help:
Consumer Credit Counseling Service of Delaware Valley:
Schedule a free appointment with a HUD-certified housing counselor- 19 local offices by calling 1-800-989-2227 or visiting www.cccsdv.org
Fannie Mae Mortgage Help Center:
The Center works directly with mortgage servicers to get quick resolutions and solutions for consumers with Fannie Mae loan modifications. For a free Appointment call 866-442-8570.
Emergency Homeowners Loan Program (EHLP, PA)
For those experiencing involuntary unemployment, under-employment, or unexpected medical bills www.phfa.org/consumers/homeowners/ehlp.aspx
New Jersey HomeKeeperFor those experiencing unemployment or reduced income, need short-term assistance, have arrearages, or have built up credit card debt www.njhomekeeper.gov/
The Reinvestment Fund (Special event tonight)
For those who are a victim of a foreclosure help scam, Details on time and location online at cccsdv.org www.cccsdv.org/news-media/news-archive/are-you-victim-forclosure-fraud