How to Deal With Mortgage Lenders to Prevent Foreclosure

Foreclosure can happen when you fall behind on your monthly mortgage payments. It's important to keep the lines of communication open between you and your lender to prevent foreclosure on your home if you are unable to make your mortgage payment.

Difficulty: Moderate

Instructions

Things You'll Need:

• Mortgage company contact information
• Mortgage documents
• Notebook
• Pay stubs
• Monthly expense log

1. Call your mortgage lender. Inform them of the situation and why you are unable to pay right now. Some lenders allow you to make an interest-only payment for a few months to keep your account in good standing or may work with you on making partial payments for a while and readjust the length and terms of your mortgage.

2. Create a paper trail. Keep a log of each call made to or received from your mortgage company. Write down in a notebook the date, time and name of the person you spoke to and what the call was about. Mail any necessary legal documents to your lender via certified mail.

3. Gather all of your monthly income information, like pay stubs, and a log of your monthly expenses. If you try to renegotiate the terms of your mortgage, the lender may ask for an update on your current financial situation.

4. Develop a plan to get back on track financially and explain it to your mortgage company. They may ask you how you plan to repay them and catch up on your payments--you need to be prepared.

5. Speak to your mortgage company with kindness and honesty. Foreclosure is stressful for all parties involved but most especially for the homeowner. Getting angry doesn't help the situation and could make things worse. Your goal is to find a reasonable and amicable solution to prevent foreclosure and being proactive helps your case.

Tips & Warnings

• If you're having trouble making monthly payments or are already a month or two behind, consider putting your home on the market. A foreclosure can wreak serious havoc on your credit rating and you want to do everything you can to prevent this.
• Don't ignore foreclosure warnings from your lenders. Take the notices they send you in the mail seriously and keep in constant contact with them as soon as you get behind in your payments. Remember, the lender is not obligated to you in any way and it's your job to keep the lines of communication open.