Mortgage Foreclosure & Refinance Resource

If you don’t make your regularly scheduled mortgage payments over a period of time, the mortgage company can foreclose on your house. This means you will lose title to your property and may be evicted from your home. It can happen to even the best intentioned borrower; unforeseen circumstances such as urgent medical bills, unemployment or divorce may force you to skip your home loan payment.

1. Do not ignore the problem and notify your lender. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house. As soon as you realize that you are unable to make your payments, talk about your circumstances with the mortgage company. Mortgage lenders are much more willing to work with you when you are only one or two payments behind. Lenders want your money and the interest that comes with it, not your house. The key is to contact the lender before your debt gets the better of you. The sooner your lender knows of your problem, the more help it can provide.
2. Read and respond to all mail and communication from your lender. The first notices you receive will offer good information about foreclosure prevention options that can help you overcome your financial troubles.Later mail may include important notice of legal action. Your failure to open the mail will not be an excuse in foreclosure court. Your lender may be writing to let you know about numerous options such as:
   • Forbearance is a written repayment agreement between a you and lender to temporarily let you pay less than the full amount of your mortgage payment, or pay nothing at all, during the forbearance period. Mortgage forbearance is often combined with other programs that bring your monthly mortgage payments current after a negotiated period of time.
   • A repayment plan is an agreement that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment.
   • Partial reinstatements occurs when you miss two or three monthly payments because of an unexpected, short-term income loss. The lender agrees to a plan whereby you resume your regular monthly payments and pay off the amounts you missed in mutually agreeable chunks over a period of time, such as one year.
   • A reinstatement occurs when you pay your mortgage company the total amount you are behind, including any legal costs and penalties and you are permitted to make regular payments then your mortgage has been reinstated.
   • There are also other options such as loan modifications, partial claims and other options that your lender may offer to keep you from foreclosing so read all mail carefully.

This is the first of a number of posts with tips on help you avoid foreclosure.