Keeping Your Home

If you are having trouble making your mortgage payments but wish to keep your home there are some options for you to pursue. Don't ignore the problem. Contact your lender as soon as possible. Lenders have set up programs to help fix bad loans and slow foreclosures - these are called Loan Workout Programs or Loan Modifications.  Below are some options that lenders may have to assist you.

Forbearance:  

An agreement to reduce or suspend payment for a short period of time. 

Loan Modification:

An agreement to change the terms of the original loan to make the payments more affordable. For example, missed payments can be added to the existing loan balance, the interest rate may be modified or the loan term extended. 

Claim Advance/Partial Claim: 

If the loan is insured, the home owner may qualify for an interest-free loan from the mortgage guarantor to bring the account current.  If so, the home owner will be required to sign a promissory note and a lien will be recorded against the home until the loan is paid in full.

Reinstatement:

Paying the total amount owed in a lump sum by a specific date in exchange for forbearance.

Repayment plan: 

An agreement to resume making monthly payments with a portion of the past due payments each month until they are caught up.

What should you do if your lender refuses to help you? Contact me for a list of housing agencies that can help assist you in preparing your loan modification package. These agencies are FREE and do not charge a fee. Please note: Unfortunately, most banks require employment to be able to modify your loan. They have to figure out how much you can afford to pay based on your salary.