Falling behind on your mortgage can really suck. As the days and months go by the stress and uncertainty will mount. It can feel like drowning.
Even if you’re able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge.
Though it can seem bleak, there are a few things that you can do to save your house from foreclosure. Let’s get into a few of them:
1. You Can File For Bankruptcy:
This is your bottom of the barrel resort. You do this one if there is nothing else you can do. Filing for bankruptcy can buy you a little bit of time if you just need to get your finance in order. It is a short term fix, mind you. Once you file, you will be able to renegotiate ALL of your debts and come up with a payment plan. If you’re being crushed by lots of debt, bankruptcy can be a good way to negotiate with lots of lenders at the same time.
2. You Can Reaffirm Your Loan:
This is a better option than filing for bankruptcy, but it may come with some unseen penalties. Reaffirmation is where you consent to paying back all or part of a debt even though you may not have had to. The first reason to reaffirm debt is so that you can maintain credit privileges with the creditor. Next, in some areas you are forced to reaffirm in order to keep whatever property secures the debt.
3. You Can Try a Making Home Affordable (MFA):
If you have the “right” kind of mortgage 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 that means paperwork. Lots of it. They WILL make you work for that money.
4. You Can Negotiate With Your Bank:
Most lenders will actually work with you if you have fallen behind on your payments. The might give you a reduction in your payment amount (sometimes only temporary)
Most of the time, lenders will advise you to refinance your loan. But, by the time you fall behind in your payments, you probably won’t qualify for a reduction in interest rate.
It takes a lot of work to negotiate with bank. They don’t make it particularly easy. It can take lots of calls and lots of patience to get through the bureaucracy. Stay classy. Ask for help from everyone but don’t be desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
If your are persistent and sincere, most banks will give you the benefit of the doubt and work with you. Sometimes they’ll be willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to make sure they get paid over the long haul. If they have to sell your house at a foreclosure auction, they’ll take a huge loss.
That sounds obvious, but for some reason bankers seem to forget it when saying no to someone who needs help paying their mortgage.
5. You Can Borrow Money From a Private Investor:
If you’re behind in your payments and need to sell fast, we can help.
In certain circumstances, we may even be able to help you stay in your home.
We work with homeowners in Dallas TX to find solutions to foreclosure problems.
We’ll let you know how we can help.