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If You Cannot Pay Your Mortgage

5/18/2011

How to avoid foreclosure

If you don't pay your monthly mortgage payments over a period of time, the lender can foreclose. This means you will lose title to your property and may be evicted from your home.

A foreclosure becomes part of your credit report and may adversely affect your ability to obtain credit in the future. To avoid possible foreclosure, it is helpful to have money saved to cover several months of your housing costs in case of an unexpected emergency, like job loss, divorce or separation, serious illness, or the death of a loved one.

WHAT IF YOU CANNOT PAY YOUR MORTGAGE?

Call your mortgage lender now! If your mortgage is with SLFCU, call 505.293.0500 or 800.547.5328 as soon as you realize that you will be unable to make your payments. We will talk about your circumstances and options to retain your home. Calling early is most effective when you work out a plan with your lender when you are only one or two payments behind.

Too many people in financial trouble wait until the last minute to call their lender. Some hope their problems will quickly resolve themselves. Others worry the lender will rush to collection or foreclosure. The truth is: the longer you wait, the greater your chance of losing your home. If you are unable to make your mortgage payment do not delay, please call your credit union immediately. In a significant number of all foreclosures, the borrowers did not return their lender's calls or written invitations to discuss payment options.

Depending upon your situation, your credit union may be able to provide you with temporary financial relief. SLFCU may be able to offer you a workout loan or refinance your loan.

A workout loan is a written agreement between you and your lender that restructures the debt owed and renegotiates one or more of the original terms of your note.

Common loan modifications include:

  • Adding missed payments to the existing loan balance
  • Extending the number of years you have to repay (When you refinance your loan you take your existing balance and create a new loan that may have more desirable payments, a longer repayment period, or a combination of the two.)

You will need to collect and be prepared to present the following financial documents when discussing how to avoid a foreclosure with SLFCU:

  • Income Information
  • Paystubs for last 30 days
  • If self-employed, tax returns for last two years
  • Warranty Deed
  • Home Insurance Declaration Page
  • Copy of Title Insurance
  • Copy of Survey

Contact a non-profit housing or credit counseling agency. Non-profit housing and credit counselors can help you analyze your financial situation. They also can help you organize a budget to pay your mortgage and other monthly expenses—without your lender's direct involvement. Finally, these agencies can help you find and take advantage of local services or programs that provide financial, legal, medical or other support.

You can find a credit counseling agency in your local phone book or by contacting the U.S. Department of Housing and Urban Development (HUD) at 800.569.4287 on weekdays between 9:00 a.m. and 5:00 p.m.You can find a list of HUD-approved agencies on their website.



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