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When Foreclosure Threatens |
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Dear Edith,
Due to a recent illness and lost job, my husband and I are struggling to keep up with the mortgage payments on our home. Real estate prices are down in our city, and we are unable to sell the house for enough money to cover our mortgage.
I am worried about the bank foreclosing on us. Do you have any advice which might help avoid foreclosure?
Thanks!
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The worst thing to do is to hide your head in the sand and hope the problem will go away. And the best thing you can do is deal with the problem as early as possible.
Contact your lender, ask about a "workout" and see what they suggest. These days, to avoid more of the foreclosures that are costing banks a lot of money, lending institutions are more willing than ever to work with borrowers.
They might agree to forbearance -- letting you skip payments for a period of time, with the unpaid interest added to the debt. They might re-structure your loan for a longer period of time, or a lower rate of interest, so that your payments are lower. They might agree to charge interest only for a while. There is no harm in asking, and the sooner you do it the better. Many new programs are coming out, aimed at helping borrowers who are in trouble, particularly anyone who had a good payment record in the past. |
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Edith
Originally published on December 28, 2007 |
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