Falling behind on mortgage payments is not fun but unfortunate reality of life is that changes will occur. Illness happens, jobs get lost, unexpected expenses arise. All of these circumstances and more can cause homeowners to fall behind on their mortgage payments.
But although change in our lives may be inevitable, banks and other establishments may not see it that way. Payments are expected to be made, and made on time. Otherwise, foreclosure is the only other option that homeowners have. Or is it?
Getting Back On Track
Believe it or not, many lenders do understand that life can get illogical, and they will often work with you if you call them as soon as you realize you are going to fall behind. Speaking with a lender about how you may extend your loan’s terms to include your missed payments is one idea to consider. While this will mean that you will be paying your mortgage for longer, it’s certainly better than losing your home.
One point to remember is that, contrary to popular belief, banks don’t want to foreclose on homes. This is because once they take over a home, they have to use their time, resources and money to sell that home and recoup their investment. Many times, a lender is not able to sell the house for the money owed to them, which places them at a definite disadvantage.
Time Is of the Essence
Acting fast is the number one way that homeowners can save themselves from mortgage payment nightmares. It may seem easier to let things go and wait to see what happens, but this can hurt a homeowner much more than it will ever help.
The time of year is also significant, according to data from the Mortgage Backers Association. They report that the second quarter is when the highest percentage of home loans become delinquent. Delinquency is defined by any payment which has been outstanding for 30 days or more.
Staying In Touch
Persistence is also vital. Homeowners are urged to not only contact their lenders when they spot trouble early, but throughout the process. And if a homeowner isn’t getting the help they need, being persistent by asking to speak with someone in the loss mitigation department is one way to ensure you get the ball rolling in your favor.
Experts also urge that homeowners in trouble ensure that all of their calls to their lender and other departments are logged in the event someone tries to make an accusation of irresponsibility.
How Lenders View Mortgage Trouble
Some homeowners hope that part of their debt will be forgiven by a lender. But this is only possible when circumstances are deemed to be extreme. Extreme circumstances may be defined differently by each lender. However, if your lender does determine that there is very little or no chance that you will be able to resume your payments, reinstatement may be the next option that they discuss with you.
Reinstatement allows for any missed payments to be caught up. After that, monthly payments can continue as before you fell behind.
Getting your mortgage payments revised will mean that missing payments are added onto your loan on a prorated basis with interest.
Being Patient Is Key – Falling Behind on Mortgage Payments
When trying to get help from your lender, experts warn that it may not come overnight. In fact, it could be a few months before you hear anything. But just because you aren’t hearing from your lender constantly, doesn’t mean that you should stop communicating with them. Not staying in touch or worse, moving out of your home may render you completely ineligible for help from your lender.
The language may also differ between departments, which can make it really difficult to communicate with all of them. For example, the customer service department may tell you that the loss mitigation department doesn’t exist, simply because your lender may refer to it by another name. If this happens, try asking for a loan modification, reinstatement or workout department instead.
Image source: 1
[colored_box color=”blue”]Guest author Tony Donovan is a frequent contributor at The Refi Guide, a site dedicated to helping consumers navigate the home mortgage and refinancing landscape.[/colored_box]