payment problems
You may experience financially troubling times throughout your lifetime. An emergency may happen, you may lose your job for a period of time, you are hit in a car accident and cannot work, etc. It has happened to the most solid borrowers out there.
If you find that you are in a situation where you cannot make your house payment, the first thing you should do is to contact your lender. Try to contact the lender before the lender contacts you. More importantly, never ignore the letters and phone calls from your lender. Failure to do so will only make matters worse.
Contrary to popular belief, your lender wants you to keep the home more than you do. By calling the lender and explaining your problems, you will generally find that the lender will work out a satisfactory plan to make up any missed payments. Don't lie about your situation; rather, explain in detail the troubles that are causing the financial strain and request advice and guidance (not for sympathy) to let your lender know you are sincere about your obligations. Your cooperation will be appreciated.
When serious financial troubles arise, your first reaction may be to borrow money to get you through the situation. However, any new loan must be paid off and will only compound your financial woes.
If your income is seriously restricted or your expenses have substantially increased (e.g. an increase in medical bills due to a car accident), your lender may suggest that you contact a local HUD-approved housing counseling agency and discuss your situation with a local loan representative. This counseling is designed to help you avoid foreclosure. He or she may discuss options such as a reduced payment, a lower interest rate until you get back on your feet, or other options you may not have been aware of.
However, if foreclosure is inevitable in your situation, consider selling the home and save any built up equity before the bank takes possession. Though no one like to lose their home, cashing in and keeping some of the money from the sale is a far better option than to lose the home, ruin your credit rating, and owe the government because they took a loss on the debt.
Most importantly, be cautious of "deals" that will save you from foreclosure. Make sure you understand the liability that is involved with the transaction. If you have serious doubts or questions about the validity of a "deal" offered to you, consult your mortgage lender, the local FHA office, a local HUD-approved counseling agency or an attorney.
Remember, a quick fix may temporarily bandage the problem but it will not cure the ailment. The best advice is to work with your lender and local HUD-approved counseling agency to find a solution to your problem.
