This is the question of the decade - one that comes up often and one for which the answers are constantly changing! If you are concerned that you will not be able to keep up with your payments, please beware of online or non-local companies that say they will save your home. Instead, call your lender(s) as soon as possible and see what programs they offer. Contacting your lender early in the process is the key to avoiding foreclosure.
Many big institutions have a "home retention" department through which they may be able to reduce your interest rate, refinance your loan, or work out another arrangement with you. They will likely want a letter explaining the nature of the hardship that is preventing you from paying your home loan, as well as bank statements and a thorough accounting of your monthly income and expenses.
Your Realtor® can talk to your lender on your behalf as long as you mail or fax a letter to the lender approving them to do so. This at least can reduce some of the stress of dealing with a big organization while you are concerned about losing your home and harming your credit rating.
You may also be eligible for help from a recently extended Hope for Homeowners program that allows the Federal Housing Administration (FHA) to continue to provide mortgage assistance to targeted homeowners. For more information on this, please visit: http://www.hud.gov/fha/home080730.cfm In the near future there may be more government programs for struggling homeowners, and I will try to keep this website updated as conditions change.
As difficult as it is to face, it's important to take action sooner rather than later. If it looks as if your only options are to sell or to go into foreclosure, it's best to get the ball rolling and try to sell as a short sale. I have been informed by lenders that selling as a short sale does affect credit ratings, but not as much as going through foreclosure.
Again, contact your lender(s) as soon as possible regarding missed payments and a possible short sale, and have discussions with your Realtor® about preparing to sell and interacting with the lenders(s) for you. Sometimes a short payoff gets pre-approved by the lender, which makes the property much more attractive to buyers. In the meantime, your Realtor® can be advising you on preparing the home for sale. Moreover, homeowners who have a Realtor® on their team often boost their credibility with the lender and can potentially buy more time.
Scott is an experienced listing agent with one of the most comprehensive marketing plans on the North Coast, and if you do not have a Realtor® already I would be happy to speak with you and do what I can to be of assistance.
If at any time you are concerned about your legal rights and protecting your assets, I recommend you contact qualified attorney for counsel.
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