4 Things You Can Do To Help Your Situation
It may seem as though you are drowning in debt when you are behind on your mortgage payments for your residence. Even if you can afford your monthly payment, making up a past-due balance can be a major hardship. If you are far behind on your payments, there are a few options that can help you avoid foreclosure and possibly even keep your home. Louisiana has seen a large number of homes lost to foreclosure, but there are many ways to prevent it.
1. Bankruptcy:
This is typically the last resort method. If you're drowning in debt, declaring bankruptcy may help you bargain with several lenders at once. It takes a lot of work and won't allow you to get out of your mortgage. Different lenders will approach your situation differently. You should get the best professional assistance you can afford.
2. Reaffirm:
It may be a good idea to play this card, but there could be unforeseen consequences. Reaffirming the loan essentially entails making an additional payment commitment. An affirmation can result in increased liabilities in some states where it is legal if your property is put up for auction.
3. Making Home Affordable (MFA):
If your mortgage qualifies, you might be able to participate in MHA. Any loans backed by Fannie Mae or Freddie Mac must be considered for MHA, and other lenders choose to participate in MFA.
With MFA, your payments and/or interest rates might be lowered – even the principal balance (if your home is worth less than you owe). If you’re unemployed, you might be able to get your payments temporarily suspended or reduced.
MFA is a government program, so be prepared to deal with lots of paperwork. It ain’t free money – you gotta work for it.
4. Negotiate with your bank:
Many lenders regularly provide some kind of assistance. You'll have to work hard at it, but you might be able to negotiate a temporary drop in your payment or a reduction in your interest rate.
Lenders will frequently advise you to refinance your loan, but by the time you're a few payments behind, you most likely aren't eligible for a lower interest rate.
To bargain with a bank, you have to put in a lot of effort. Usually, getting through the bureaucracy requires a lot of calls and saintly patience. Never, ever be impolite. Don't sound desperate when asking for assistance from everyone you speak with. To convince the bank that you intend to stay in your house for the long term, explain your situation and provide supporting documentation.
Most banks are understanding if you only need a temporary fix and want to stay in your house. A few months' worth of payments may occasionally be added back to the principal balance of your loan. They only care about the money, so remind them that without their assistance, you won't be able to give them much more in the long run. They will suffer a significant loss if they are forced to sell your home at a foreclosure auction.
Comments