What do I do when I'm falling behind on Mortgage Payments and selling isn't feasible?

by nancy woodward

There are so many homeowners in this position today. They find themselves owing more to their lender(s) than the current market value of their home. As Real Estate values decline this occurence is becoming more common. Many families with multiple mortgages are realizing they can't sell their home and break even today.

I believe all lenders really don't want your home. They want you to continue making interest payments for the next thirty years. The lender makes money by receiving your continuing payments - the interest portion of your payment is the lenders income stream.

Lenders actually rework 90% of loans for their good customers who are experiencing problems meeting their obligation. They have more than one option which will help you stay in your home.

1. Partial Reinstatement - you agree to continue making your payment as usual and makeup the balance overdue in the next year.

2. Short-term Forebearance - You skip a number of payments or reduce your payment for a few months - then make up the difference in a set period of time.

3. Long-term Forebearance - Payments discontinue for a longer period of time (usually more than twelve months) then you begin to repay all.

4. Loan modification - Your payment is permantely changed. This could be a rate change, time extension or a combination so you can continue making your payments.

5. Other terms - the bank has the flexiblity to combine and or modify whatever it takes to reduce your payment to an acceptable level.

Call your lender when you realize you will be having a problem meeting your obligations. You need to ask for the correct department - don't speak with collections. Their job is to collect money, not modify loan terms.

Most lenders have experienced these problems over and over in the past year. They will be willing to talk to you.