deal with mortgage delinquency

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Following my interview with Jenna Lee, Connell McShane and Daegan McDowell on FOXbusiness.com yesterday, it was clear from the e-mails that many people are dealing with crippling issues paying their mortgages and that the big concern is That many people are waiting for the government. intervention to solve the problem. While we expect answers and helpful solutions tomorrow on what the government plans to do, it will take some time to implement those policies. In my experience, this takes some time – something that not many people have. So, I think people struggling should keep taking steps to prepare in the interim to ease their situation. For those who are in those situations, here are some simple steps to get started. More advice to come:

1. Try to be present: Foreclosure is devastating to a person’s credit and future access to credit, so we want to avoid it at all costs. Try to keep the mortgage current.

2. Establish a Budget: determine all income and all expenses to understand where the money is going;

3. Spend less and withdraw: reduce essential expenses as much as possible (lower insurance premiums, lower utility usage and costs, real estate taxes, food, clothing and transportation budget recalculation) and eliminate those that are unnecessary;

4. Add Income or Sell Personal Items: If necessary, look for part-time work or supplemental income or sell unnecessary items (via things like Craig’s List, etc.)

5. Negotiate Unsecured Loan Payment Plans: If the payments are still too high to afford the mortgage payments, negotiate modified payments with unsecured creditors and stop using credit cards and loans immediately. Again, the intention is to repay the loan, only on revised terms.

6. Determine the Maximum Affordable Mortgage Payment: Once all the previous steps are done, go for the maximum you can afford. If you can afford the payments going forward, stick to your budget and ride out the storm. If you can afford your mortgage payments but cannot make past due payments or still cannot make full mortgage payments;

7. Contact the lender to discuss modification: Get in touch with your lender to discuss modification options now. This can include a forbearance where you agree to meet past due payments over time, or deferring past due payments until the end of the loan (thereby bringing it up to date) or simply modifying the loan terms including payments It is possible and/or reduction in rate and/or increase in duration. Have all income verification and budget information ready. Create a plan of what you have done to reduce and eliminate expenses or increase income. Show the lender that you’ve done your homework. If possible, try to meet face to face. If not satisfied, contact a lawyer for help negotiating.

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