If you are currently behind on your mortgage payments, then the possibility of foreclosure can send you into a panic. Your lender doesn’t want to foreclose on your property. Many lenders offer borrowers choices for making up missed payments instead of simply seizing the property. This benefits both you and your lender. Staying in close contact with your lender, however, is often a crucial factor in whether it’s possible to negotiate a bargain.
Repayment Strategy
If your mortgage lender approves a repayment program, it adds some of every mortgage payment that you missed for your prospective mortgage payments. Though this temporarily raises your prospective mortgage payments, it allows you to repay your outstanding debt without forcing one to come up with a lump sum.
Reinstatement
You pay your mortgage lender the full amount due If you refinance your mortgage. Including any mortgage payments you’ve missed along with any overdue fees you incurred by doing this. If your mortgage lender allows you to reinstate your mortgage, it will assign you a date by which you must bring your loan current. Some countries offer special programs to assist homeowners reinstate their mortgages and remain in their houses. California, as an Example, offers the Mortgage Reinstatement Assistance Program. This program provides borrowers with a counselor who negotiates with their mortgage lenders for a reinstatement agreement. Some assistance programs, such as MRAP, even offer temporary reinstatement loans to qualifying borrowers that can establish a financial hardship.
Loan Modification
In case your problem paying your mortgage obligations isn’t temporary and you will barely maintain your current payment, much less catch up on payments you’ve missed, a mortgage loan modification might be the answer. Through loan modification, your mortgage lender changes the terms of your present home loan in an effort to lower your monthly obligations. The Federal Trade Commission notes that creditors can alter your mortgage in many different ways, such as extending your current loan or lowering your rate of interest. Your mortgage lender can then roll up your overdue payments and any resulting fees to the new loan. This allows you to catch up on your payments over time without worrying that your overdue mortgage payments could result in foreclosure.
Chapter 13
If your lender won’t work with you personally or you aren’t eligible for assistance, filing for Chapter 13 bankruptcy allows you to pay your overdue mortgage payments over time without sacrificing your premises. Unlike Chapter 7 bankruptcy, in which the bankruptcy statute seizes and liquidates your assets to settle your debts, a Chapter 13 bankruptcy allows you to maintain your assets. The bankruptcy court may rate your outstanding debts and work together with you to construct a three- to five-year repayment program, which includes some mortgage debt that you owe.