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What To Do When You Can’t Pay Your Mortgage For most families, a home is not only a significant financial investment but also a source of pride. The loss of a home, due to unexpected events such as unemployment, can be financially and personally devastating. If you have been laid off or are facing unemployment, you can keep your home - if you know the right steps to take. The Department of Housing and Urban Development/Federal Housing Administration, the Department of Veterans Affairs, the Department of Labor and the mortgage industry have worked together to produce important basic information - - and key links to local groups and organizations - - that can help you get through difficult times without losing your home.
Facing Money Problems? Financial problems are most often associated with the following life changes:
- Loss of job
- Cuts in work hours or overtime
- Retirement
- Illness, injury or death of a family member
- Divorce or separation
If your family is facing any of these changes and you cannot pay the bills, now is the time to look closely at what you owe and what you earn, eliminating unnecessary spending and reaching out for help if you still can't meet your financial obligations. Taking action now can help you protect your family from the loss of your home. This page was created to help you find advice, information, and web links that will help you keep your home.
Steps to Take When You May Not Be Able to Pay Your Mortgage- Contact Your Lender NOW!
- Talk To A Housing Counseling Agency
- Prioritize Your Debts
- Explore Loan Workout Solutions
- Are Your Eligible For Disaster Relief/Military Options?
- Beware Of Predatory Lending Schemes
- Try Other Resources.
Contact Your Lender as Soon as You Have a Problem Many people avoid calling their lenders when they have money troubles. Most of us are embarrassed to discuss our money problems with others or believe that if lenders know we are in trouble, they will rush to collection or foreclosure.
Lenders Want to Help Borrowers Keep Their Homes.Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems. Lenders have workout options to help you keep your home. However, these options work best when your loan is only one or two payments behind. The farther behind you are on your payments, the fewer options are available. Do not assume that your problems will quickly correct themselves. Don't lose valuable time by being overly optimistic. Contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.
Finding Your Lender Check the following sources for lender contact:
- Your monthly mortgage billing statement
- Your payment coupon book
- Web links or customer service numbers found under "help for homeowners" lenders
Information To Have Ready When You Call: To help you, lenders typically need:
- Your loan account number
- A brief explaination of your circumstances
- Recent income documents (such as pay stubs; Benefits Statements from Social Security, Disability, Unemployment, Retirement, or Public Assistance). If you are self-employed, have your tax returns or a Year-to-date Profit and Loss Statement available for referral
- List of household expenses
Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for assistance, you must complete the forms and return them to your lender quickly. The completed package will be reviewed before the lender talks about a solution with you.
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