The Mother and Daughter Realty Team

Your statement of the problem is one of the most important factors in obtaining the help you need from your lender and other creditors. Always be honest and realistic, and provide documentation.
These items are very important in determining what your options are:
• Statement of your problems - a hardship letter
• Your Personal Financial assessment (most lender require you submit your financials)
• Send in current information every 30 days.
• Do you have Equity?
• Know your options - First before making a decision
Here are some resources:
KnowyourOptions.com
by Fannie Mae
These are some of the options (see list below)
~~~~~~~~ Options Defined ~~~~~~~~~
• The easiest way to cure a delinquency is to pay the lender everything is owed. This includes missed payments, any late fees associated with these payments, and any other fees which the lender charges as a result of your delinquency. The reinstatement period varies from state to state. In California you have the legal right to reinstate your loan up until 5 business days prior to the trustee’s sale.
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• This is a written agreement between you and the lender to help you make up missed payments. Generally these agreements require higher payments than the regular monthly mortgage amount for a short period of time, until the loan is brought up-to-date. You must not agree to a payment plan you cannot honor; but you must be willing to pay what you can realistically afford. If you fail to meet the terms of this agreement, you will probably receive no additional help from the lender.
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• A loan modification involves changing one or more terms of a mortgage. Modifications can be considered to reduce the interest rate of the mortgage, change the mortgage product (from an adjustable rate to a fixed rate, for example), extend the term of the mortgage or capitalize delinquent payments (add delinquent payments to the mortgage balance — only available in extreme hardship situations). Modifications are not easily granted and there must be strong, justifiable reasons for the request.
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• Programs may provide for paying down all or a portion of an overleveraged loan and taking back a note from the borrowers for that amount in order to facilitate additional modifications.
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• Programs may provide incentives for financial institutions to write-down a portion of unpaid principal balance for homeowners with severe negative equity.
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• Programs may provide for assistance to unemployed borrowers to help them avoid preventable foreclosure.
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• The lender will allow you a period of time (3 to 6 months generally) during which to make either lower payments or no payments at all. Unless the loan term is extended, later payments generally will have to be higher than the original monthly mortgage payments until the loan is up-to-date again.
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• If you qualify, this program allows you to sell your home to prevent avoidable foreclosure. Programs may provide for assistance with short sale.
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• If you qualify, you would transfer ownership of the property to the mortgage servicer or one of their designated partners.
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• On certain types of loans, if you qualify, you may be able to bring your account current by creating a second lien on your property for the amount that is delinquent on your loan.
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• Could allow you to access and use a portion of your home's available equity to pay off your existing mortgage and receive the remaining proceeds to use as you like - without having to make any monthly payments.
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• (Applicable to FHA-insured loans only) The lender may allow partial payments for up to 18 months to allow the borrower to get back on track. The lender may also offer “partial claim”, or advance funds, to help you become current.
• HUD Partial Claim: If your loan is an FHA insured loan, your lender may be able to obtain a one time payment from the FHA-Insurance Fund to bring your mortgage loan current with payments.
• This will usually not be an option if you are seriously delinquent on the current mortgage (more than 3 payments late). If you are current, however, and there is equity in the property, this might be an option.
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• Possible even if you are seriously delinquent if there is enough equity in your home. Not generally feasible when you are having trouble making first mortgage payments - a higher interest rate and another payment would only be compounding the problem. May be used to eliminate consumer debt.
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• While this may seem to be the most unpleasant option, it may allow you to save the property. A Chapter 13 bankruptcy may help you save your home from foreclosure if all other options have failed. You will need to consult a bankruptcy attorney. Legal advice is always recommended prior to filing.
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• Service Members Civil Relief Act (Military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Service Members Civil Relief Act. The American Bar Association has a network of attorneys that will work with service members in relation to qualifying for this relief.
Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments. There are other options such as renting out your property or a portion of it in order to bring in more income. Another possible option:
Get help, AVOID FORECLOSURE if at all possible.