Mortgage problems? A phone call can help

Owning a home is a great responsibility and one of the greatest expenses we will have in our lifetime. Mortgages typically last for 30 years; that’s a lot of financial commitment before you can pay off your mortgage. Each and every month, you have to make that mortgage payment, regardless of whether it’s convenient or even affordable. You may lose your job or have an illness and miss work, but the payment on the home loan is still due each and every month.

But what if you just cannot make the payment? What if that layoff has lasted longer than you thought or what if that illness has lingered longer than you anticipated? What do you do then?

For a large majority of people with such problems, the answer is - do nothing. 

Recent surveys show that when mortgage problems

strike, most people do not call their lender to discuss it. Even stranger, when their lender finally calls them to ask about it, 75% of the homeowners didn’t return the calls. Those who did waited until foreclosure was imminent.

Why not return the calls? Mortgage problems aren’t all that uncommon; many people will have some sort of financial trouble during the 30 year term of their home loan.

Apparently, most people are simply too embarrassed to call. That is unfortunate, as calling your lender is the first thing you should do when you find yourself unable to pay. Other reasons given are such things as:

• The lender can’t do anything, so why call?
• Fear (of foreclosure, extra fees, or any one of a number of other things)
• Not knowing who to call or what to say.

It turns out that many people are simply unaware that there may be a number of options available to them if they cannot meet their house payment. Among them:

• Forbearance - your lender may allow you to pay less than your normal payment or even nothing at all for a short period of time. This may be a good option if you know you will be able to make your payments in a short period of time.
• Repayment plan - Your lender may allow you to make up your missed payments by adding a portion of them to your next few payments until you are caught up.
• Restructuring of your mortgage - the length of the mortgage could be extended to make up for the missed payments.

Most homeowners with mortgage problems don’t give this much thought, but lenders are quite reluctant to foreclose on a property. Taking a property back is expensive and time consuming and then they have to sell it to recoup their money. Most lenders would much rather try to work out a solution that’s agreeable to both parties than to throw the occupant out of the house. It’s just good business.

Of course, you will never know about any of these possible solutions if you do not take the time to call. Most people who finally do so are surprised at how nice the lender’s representatives are and how easy it was to work out a solution to the problem.

It is in your best interest and your lender’s best interest for you to keep your house. As long as you show a genuine interest in making good on your payments, your lender will almost certainly work to help you out.