No one ever wants to see the hard work, equity and emotions they put into their home go up in smoke because they can no longer afford their mortgage payments. Today you see on street corners signs stating “we buy houses with cash”, which just goes to show you that thousands of Americans today are in a mortgage crisis. From job loss to those who took out a mortgage with an adjustable rate to various financial problems, thousands of Americans are struggling with their mortgage payments.
If you are behind on your mortgage payments, you do have options. Never give up. Your first step should be to contact your loan provider to go over your options, the sooner you do this the better. If you put off discussing the matter with your loan officer, you could be reducing your options the longer you wait, and make matters worse. With the big push from the government against foreclosure, many loan providers are now offering several options for borrowers who are behind on their loans. Even if you have been turned down for help once, you should try again. You may be wondering exactly what type of help they can give you, lets discuss several of your options.
You may qualify for the HAMP program, or the Making Home Affordable Modification Program. HAMP is a loan modification program for those who owe less than $729,750 on their primary home and a first mortgage. To qualify for HAMP your loan had to have been made prior to January 1, 2009. The last two qualifications are that your mortgage payment, which includes your principal, interest, taxes, insurance and homeowner’s association dues, is more than 31 percent of your current income, and that you are facing a financial hardship such as an illness, medical costs, or a job loss for either you or your spouse. If you meet those qualifications you could receive a loan modification that will result in lower mortgage payments.
There are other programs out there to reduce your mortgage payments, even in cases where your homes value has decreased. For example the U.S. Department of Housing and Urban Development offers the HARP program, known as the Home Affordable Refinance Program and the the HOPE for Homeowners (H4H) program, both of which you may qualify for, simply contact your local HUD office.
You can also opt to try and deal directly with your loan servicer. You could try for reinstatement where you pay back your past due payments, by a mutually agreed on date. This can work if you have equity in your home and are willing to tap into it for a loan to pay back this amount. You should also see if you can refinance at all, reducing your monthly payments. Some lenders will also agree to a repayment plan where you pay back your past due amount over time, but this plan tends to only work if you have missed only a few payments due to a short term setback. You can also ask for a forbearance, where payments are suspended for a short time, and the money is repaid at a later date.
If you are falling behind on payments you do have options, you always have hope. Your local HUD office can assist you with resources for underwater homeowners who are behind on their mortgage. The key is acting fast and not putting off doing what needs to be done.
