How to keep your home when you are defaulting on your mortgage

There is nothing worse than being behind on your monthly bills. The feeling of dread everytime you open the mailbox and not to mention the embarrassment when the phone rings. You are more than likely the majority of people and ignore the calls and the letters because you feel there is nothing you can do.. well there is and it is less painful than you think. Treat your finances like you would treat a band-aid!

Instructions

Difficulty: Challenging

Things You’ll Need:

• computer
• patience
• level head
• all your bills

1. First thing is first- take out the pile of bills. Either write or type out:
   1. Creditor name, total amount you owe them, minimum monthly payment and the amount you are past due
   2. Write down your total monthly income
2. Now you will want to prioritize your bills. Usually in the order you can keep them.... home... cars... and down the line. Look honestly at where you can trim the fat of your lifestyle. If you have 3 cars and only really need two then sell one- it will save you the payment and the insurance.
3. Once you know where your finances sit at now this is where you contact your mortgage company. IF you know you cannot make up the payments ask for the loss recovery department (if they are unavailable ask them to mail out the documents for you)
4. You will then plead your case- you will fill out forms stating 1) how much you make 2) how much you owe 3) why you missed the payments and what resolutation you would like.. for example say you lost your job. You would give them documentation you received a different job and the pay and request that the 2 payments you are behind be put on the back of the loan
5. This is the tricky part- you need to fax the documents into the mortgage company and call them constantly to ensure they receive it! This can take up to 2 weeks so I recommend calling them MON-WED-FRI (your home is worth it!) as you know the squeaky wheel gets the oil- you will find your papers get reviewed quicker if you call frequently.
6. Once your paperwork is reviewed they will call you to go over options. Make sure it is a solution that works for your family but also remember that you are working to find a solution to keep your home! Most times the lender will request a "downpayment" and then move your payments to make you current or they will split your past due payments and add a couple hundred dollars to your current payments until you are current. Either way the lender will work with you to help you keep your home.

Tips & Warnings

• When you speak to your lender.. keep your cool and be polite nothing will sink you faster than being snotty or rude to representatives
• Keep in mind that your lenders goal is to be paid back money they loaned you, put yourself in their shoes if you loaned someone money
• DOCUMENT EVERYTHING- verbal isn't solid make sure any promises/deals you receive in writing
• get a notebook and write down- days you calls/received calls, who you spoke with and the result for your notes
• most lenders require documents notarized - you can do that for free at your local bank!
• Don't skip your budget- it is crucial to show you where your money is going and what you can afford. Otherwise you may agree to a payment arrangement you cannot afford.
• If you cannot afford your home then explore options of selling your home before you default, renting it out etc.
• READ all your paperwork before signing