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Step 1
Do not hide and hope the problem goes away. Be proactive and contact your lender as soon as you have a problem. If you start falling behind, it'll be harder to have your loan reinstated and you'll end up in foreclosure and losing your house. Work with your lender so you can determine what options are available. Lenders have the incentive of working with you because they don't want to own a house.
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Step 2
If you don't take a proactive stance and start receiving letters from your lender, open the letters. Ignoring them will not make them go away and will only make matters worse. Usually, the first letter you receive will have information about the foreclosure process and what options you can take to work with your lender. If you continue to ignore your mail from your lender, you might be ignoring a notice of pending legal action.
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Step 3
If you begin to see that making your payment will become a problem, find the loan documents you signed and read them right away. That way you'll know what steps a lender may take if you can't make your payments. Arm yourself with information about your state's foreclosure laws and timeframes so you know what you are up against.
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Step 4
Get help from the U.S. Department of Housing and Urban Development (HUD). This governmental agency has free or low-cost housing counselors who can help you understand the law and what you can do. They may even help you with your finances and represent you when negotiating with your lender. To find a HUD approved counselor near you, call (800) 569-4287 or TTY (800) 877-8339.
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Step 5
Take a good hard look at your budget and start to cut back on spending to free up funds. Look at eliminating cable tv, cell phone service, health spa membership, etc. If you have to make a choice between paying for your home or your credit card, choose your home.
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Step 6
If you've cut back as much as you can, it might be time to consider getting a second job. Even if you still don't bring home enough money to make the full mortgage payment, this shows your lender you are serious about keeping your home. Worse case scenario - start selling assets to raise the money needed to reinstate your loan.
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Step 7
Avoid companies that tell you they can help you stay out of foreclosure. These companies usually charge a pretty large fee, sometimes the equivalent of 2-3 mortgage payments. Your lender or a HUD approved housing counselor can provide the same service free or for a very low fee.
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Step 8
If you decide to have a company work for you instead of working with a HUD approved counselor, be sure to read the contract you are signing. Be sure you are not signing away your house. Understand all of the contract terms and if necessary, have an attorney review the document.
