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Here are the answers to the perhaps the most important question for people facing difficulties maintaining their mortgage. The information and tips that you’ll get here are from a completely non-biased not-for-profit perspective. As the vice president of lending and homeownership for Community HousingWorks and the president of the Housing Opportunities Collaborative this is the very same advice our agencies offer. With the market as it is, and with what we know about what it is likely to look like in the near future, our agencies and many others are working with local, state and federal agencies and government to create stable alternatives to foreclosure and lessen the impact that this issue will create in our neighborhoods and economy. One of the strongest recommendations being widely promoted and accepted is support and use of housing counseling agencies with non-profit loss mitigation certified counselors. This week, our Collaborative and sponsors are holding a nationally certified training for over 30 service providers in San Diego County — helping to increase the capacity of local agencies to counsel families in need, make a plan, negotiate the terms and get those families back on track for a stable financial life.
What are my options if I cannot make payments?
- Forbearance. You are allowed to delay payments for a short period, with the understanding that another option will be used afterwards to bring the account current.
- Reinstatement. When you are behind in your payments but can promise a lump sum to bring payments current by a specific date.
- A Repayment Plan. If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past due amount to each current monthly payment until your account is current.
- Modifying Your Mortgage. The lender can modify your mortgage to extend the length of your loan (or take other steps to reduce your payments). One solution is to add the past due amount into your existing loan, financing it over a long term.
- Selling Your Home. If catching up on payments is not possible, the lender might agree to put foreclosure on hold to give you some time to attempt to sell your home.
- Property Deed in Lieu (Give it Back). The lender can allow you to give-back your property — and then forgive the debt. Give-backs do, however, have a negative impact on your credit record, although not as much as a foreclosure. The lender might require that you attempt to sell the house for a specific time period before agreeing to this option, and it might not be possible if there are other liens against the home.