How to Negotiate a Mortgage Delinquency
The number of homeowners who were delinquent on their mortgage loans hit an all-time high during the third quarter of 2009. The Mortgage Bankers Association reported that 14.41 percent of all mortgage loans were either delinquent or in the foreclosure process in this quarter. If you've fallen behind in your mortgage loan payments, it's time to negotiate a loan modification with your lender or bank. It might save your home from falling into foreclosure.
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Things You'll Need
- Current mortgage statement
- Credit card bills
- Student, auto, personal and other loan statements
- Most recent federal income tax return
- Two most recent paychecks
Instructions
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1
Make copies of the financial paperwork that you'll use to prove to your mortgage lender that you are going through a financial hardship that makes it impossible for you to pay your monthly mortgage bill. These papers include your last two paychecks, most recent federal income tax statement, credit card bills and other loan statements.
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2
Call your mortgage lender at the number listed on your current monthly mortgage statement. Tell your lender that you are delinquent in your mortgage payments and that you can no longer afford to make them because of a financial hardship. Request a loan modification that will result in a lower monthly payment.
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3
Explain to your lender why you are no longer able to afford your monthly payments. Perhaps you've lost your job. Maybe your employer has dramatically cut your hours. Maybe you injured yourself on the job and can no longer work. Maybe a family member is suffering through a serious illness that has eaten away at your savings.
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4
Compose a hardship letter. Some lenders will require that you put into writing both your request for a modification to a lower monthly payment and the reason why you need this modification. Simply list your financial hardship and your goal: a lower monthly mortgage payment.
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5
Send to your mortgage lender or bank the copies you made in Step 1. Send, too, a copy of your hardship letter if your lender requested that you write one. Now you'll have to wait as your lender considers your case. Your lender will determine whether your hardship is severe enough to warrant a loan modification.
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6
Agree to a specific modification. Your lender has several ways to lower your monthly payment. It can drop your interest rate, slash your principal balance or simply lengthen the terms of your loan. All will lower your interest rate.
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Tips & Warnings
Ask your lender if it is participating in the federal government's Making Home Affordable Program. This program provides financial incentives to lenders to encourage them to modify the loans of struggling homeowners. If your lender is participating in the program, it might speed up your loan modification.
