5 Choices If You Can’t Make Your Mortgage Payment

Going into a Foreclosure can be a demoralizing situation.  Saving your home from foreclosure can be exhausting, expensive and incredibly stressful.  If you lose the battle, you may not be able to buy a new home for several years, and even renting an apartment or home will require letters of explanation and proof of affordability.  So…more humiliation.

Before you lose your home, you still have choices.  If you miss three mortgage payments, you are facing mortgage default and the earlier you can work out a resolution, the more options you have.

  1. Sell your home before it is foreclosed.   
    • Short Sale:  If you are selling the home for less money than you owe on your mortgage or mortgages, you will need permission from all mortgagees (lenders) on the home
    • Normal Sale:  if you are selling the home for as much as, or more than you owe the lender, you do not need lender permission to sell.  The lender’s interest will be satisfied through the sale.  To keep the balance from rising due to missed payments, try to keep making your mortgage payments until the sale is completed.  Talk to your lender and let them know you are selling the home.  Document each conversation and loan payment regarding the account until the mortgage loan is paid off through the sale.
  2. Deed in Lieu:  You can contact the lender and offer to sign over the deed in lieu of foreclosure.  If you choose this option, attorneys often recommend that you have an attorney review the Deed in Lieu agreement to make sure you are not held liable for any remaining unpaid balance after the property is sold at auction.  Some attorneys can also  negotiate cash to cover moving expenses for you in this option.
  3. Request hardship assistance on your mortgage.  Even though the Home Affordable Modification Program (HAMP) has ended, many lenders are willing to offer in house loan modifications to cut their losses experienced in foreclosure.  A loan modification means the terms of your mortgage are changed without changing the lien position of the lender.  The idea is to help you catch up on your mortgage and save your home.
  4. You can fight the foreclosure.  This is best done with legal representation, as local foreclosure defense attorneys know the process in their jurisdiction and know which defenses still work and which defenses are no longer effective in court.  Wrongfullyforeclosed.com can introduce you to a local attorney to discuss your case and decide your best route.
  • You can choose to do nothing.  In states judicial foreclosure states, the judge will make a default ruling since you did not respond, and the lender will take ownership of your home, evict you and proceed to sell the property to satisfy the  note.  Any proceeds shortage may still be owed by you, but will no longer be collateralized debt, unless you have other property to lien.  In a nonjudicial state, a trustee will publish intent as required and then sell the property in a trustee sale.  Choosing to ignore the entire foreclosure can end up being more expensive than any of the other choices, since some states allow collection of remaining unpaid debt, and since the lender will add on the expense of the foreclosure process to the balanced owed.

Foreclosure is a legal process, and unless you are versed in this area of law, it would be a good time to consider being represented by an attorney who is able to protect your interests, especially when you feel your lender is not being forthright with you.  Get the facts without obligation at wrongfullyforeclosed.com and find out how an attorney could help you.