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Note: If you don't see my picture at the top left of this page, You Need To Act Fast If Behind
On Your Mortgage Payments!
When you fall behind on your mortgage payments, your options dwindle as time passes.
If you confront the problem quickly, you can give yourself time to keep the house or at least sell it for a fair price. Let the situation drag out, and you’ll get stuck in foreclosure. "The first thing we encourage people to do is contact your mortgage company," says Susan Hunt, housing counselor for Consumer Credit Counseling Service of Greater Atlanta. "Contrary to what seems to be a prevalent belief among consumers, mortgage companies really want to find a way to help consumers stay in their homes." The best way to resolve a mortgage delinquency is reinstatement. That’s when you’re behind on your payments for a month or two or maybe more, and you send the lender a check for the entire past-due amount. Just like that, you’re current on your payments. Think it’s impossible to raise that much cash quickly? "You’d be surprised at how many people have an extra car that they don’t need that they could sell," Hunt says. Another option is a catch-up plan. Say you fell $2,000 behind in your mortgage payments while you were unemployed. Now you have a job, and you can afford your regular mortgage payment plus $500 a month. The lender might let you catch up in four months. Some lenders will add the past-due amount to the back of the loan, in effect extending it a few months. Others will divide the past-due amount over the loan’s remaining term, increasing the monthly payment a few dollars. If you fall more than three months behind without working out some sort of agreement with your lender, you are likely to face foreclosure and eviction. Before that happens, the bank might hire someone like Joe Smith, founder of a Cincinnati-area company called Default Mitigation Management . Smith is sort of a cross between a bill collector and a credit counselor. Smith says he has referred borrowers to a credit counseling service, persuaded one family to sell an antique car to settle a delinquent second mortgage, and even discovered that a borrower had been defrauded. After the workout possibilities have been exhausted, it’s time to let go of the house. "Our advice would be to contact the lender and say you want to sell the house," Hunt says. If you’re not too far behind in your payments, you probably will be given time to list the house with a real estate agent and sell it. If you owe more than the house is worth, the lender might accept a "short sale," in which you sell for less than the loan amount and you and the lender walk away with your financial losses. Then there is the "deed in lieu of foreclosure," in which you hand over the keys and transfer the deed to the lender, which forgives your mortgage. Then the lender sells the house. With all of these options, the borrower has some say in the matter. That’s not the case in foreclosure, the legal process by which the lender takes the house and evicts the borrower. Foreclosure happens to those who delay too long. Call or e-mail me now, so I can help you resolve this immediately.... Sincerely, -"CHILI"
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