Can’t Make Your Mortgage Payment? Where to Turn

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The first thing you should always do as a first step if you ever reach that point where you are having difficulty making your mortgage payment is quite simply…call your lender. Your mortgage lender may have options to help you make your payments more affordable or to avoid foreclosure.

Your lender should be able to tell you if Freddie Mac or Fannie May owns your mortgage. If your loan is owned by Freddie Mac or Fannie Mae, you are eligible to be considered for the governments Making Home Affordable Program. More information is available at www.makinghomeaffordable.gov.

If you wish, you may conduct a search using their secured, self-service look-up tool to see if they own your mortgage. Please enter your information carefully – a spelling error or other small mistake could cause an inaccurate result. Abbreviations, typos, or including the “Street Type” in the “Street Name” field can also lead to incorrect results.

If neither Freddie Mac nor Fannie Mae owns your loan, ask your lender if they still participate in the federal Making Home Affordable program. If so, they can help you determine your eligibility. If not, don’t give up! Ask your lender about other options to make your payments more affordable or to avoid foreclosure. Many lenders have their own loan modification programs available. You may also be able to refinance, set-up a repayment program, or short sale your home.

The U.S. Department of Housing & Urban Development (HUD) has housing counselors that can help you contact and work with your lender to get help with your mortgage, and also provide free budget and credit advice. Call HUD (800) 569-4287 or visit their web site for a list of approved housing counselors in your area.

You can also contact the Call the Homeowners HOPE^TM hotline at (888) 995-HOPE to reach trained housing counselors who can provide advice and help you develop a plan.

What to expect when you call your lender.

Being well organized and prepared will help your lender better understand your financial position, assess your qualification for workout options, and will likely result in a more productive conversation.

- Be sure to have your account information handy and be prepared to provide a short explanation of why you are unable to pay your mortgage payment, or why you anticipate trouble in the near future. Is there a loss or reduction in income? Is there a medical emergency? Are you current on your loan but have not been able to refinance into better terms?

- If you don’t have a budget, now is the time to know exactly what you are spending each month. If you can, assemble your monthly budget and have it on hand.

- You’ll also need to have the following documents readily available:

–  Your most recent monthly mortgage statement
–  Pay stubs or other documents showing your household’s monthly pre-tax income
–  Most recent tax return
–  Second loan or home equity line of credit statements
–  Account balances and minimum monthly payments on credit cards, car loans, student loans or other debt
–  A short, concise description of the financial hardship that is causing – or leading to – a mortgage delinquency

Be prepared for more than one conversation. Your lender may require you to complete a loan workout package. It is important that you complete it as soon as you receive it because in some cases the lender cannot proceed to the next step without the completed and signed documents.

Questions to ask your lender:

- How much time do you allow to complete a work-out?
- What are your obligations under the work-out package?
- What are the specifics? Be sure to ask what is due and when.
- Will a foreclosure sale of your property be put on hold while your lender looks at the possibility of a workout package?

And lastly, if you are having trouble reaching your lender, be patient and diligent. Lenders are working hard to get to every call and sometimes it may take longer than you expect. Once you start working with your lender, if you haven’t heard back from them after a reasonable amount of time, call them.

Tags: mortgage payment, mortgage lender, avoid foreclosure, makinghomeaffordable, freddie mac, fannie mae, mortgage payment assistance, loan modification, refinance