For many people who have lost their jobs, the prospect of losing their homes is a major concern - and for good reason. No one wants to deal with the stress and pain of going through foreclosure, being evicted from their home, and having to find somewhere else to live. And many people see mortgage lenders as being particularly unforgiving - they think that the lender would like nothing better than to take possession of their homes and sell them.
If you've lost your job, the thing to remember is that your lender really doesn't want to repossess your home. Mortgage lenders lose millions of dollars every year on foreclosures, because they can only sell the homes for a fraction of what they're worth. Not only that, but mortgage companies incur thousands of dollars in legal fees and other expenses every time they foreclose on a home. So it's in your lender's best interest to help you find a way to stay in your house.
It's critical to contact your mortgage lender as soon as you lose your job, even if you haven't missed a payment yet. Being proactive wins quite a few points with mortgage companies, because they see that you are willing to work with them. They will give a borrower who stays in contact a lot more leeway than someone who ignores the problem.
Typically, mortgage companies will offer several options. They may be able to offer you reduced payments for a few months to give you time to find employment. If that doesn't work, lenders are sometimes willing to agree to a forebearance plan. This typically involves a month or two with no payment due, followed by a couple of months of reduced payments.
Be careful when agreeing to a forebearance plan, though, because it will usually involve a large balloon payment after the forebearance period has ended.
Lenders are also embracing the Home Affordable Modification plan that was enacted earlier this year. If you meet the requirements of the plan, your mortgage company will reduce your interest rate and/or extend the term of your loan to lower your payments. This is a great option if you are already a few months behind on your mortgage payment, because lenders will halt any foreclosure proceedings when you are approved for the modification.
Jay Fleischman, a New York consumer-protection lawyer, has a great free report on his site: "The Consumer's Guide to Defending Foreclosure". It includes:
- 9 secrets of defending your foreclosure
- SIX of the serious mistakes lenders make in foreclosure cases
- TEN warning signs that a foreclosure rescue scammer has set his sights on you
- FOUR of your important legal rights in a foreclosure case
- SIX ways to attack the lender’s foreclosure case
- FOUR mistakes that will lose your case right from the start… and how to avoid them
- THREE ways to tell if you have the wrong attorney… including:
- How to tell a paper-pusher from a fighter
- What to do when you find the right attorney for your case
The important thing when you're at rist of losing your home is to be proactive in seeking solutions. Jay's free report is a good start. You can also turn to your neighborhood chamber of commerce for advice, or call an attorney in your area.
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