There are many reasons people are put in a position of not being able to pay their mortgage including a loss of income and unexpected expenses. The worst thing you can do in this scenario is to ignore the problem and hope it goes away. This may seem silly to some but it is very common because it can be embarrassing or it just seems easier to avoid the problem.
The good news is, if you are reading this entry, you are either preparing yourself for the "what if" or you are taking steps towards taking care of the problem.
Step 1: Come Clean
The first step would be to speak with the company that holds your mortgage and inform them that you are struggling to make your payment this month and explain why. Make sure you have documentation of this conversation in written form. This may be a humbling experience but it is important. Also, don't wait too long. The more payments that you miss, the more expensive a modified payment gets.
Step 2: Do Your Homework
Look into options and your rights no matter what stage you are in. If you think your financial situation has changed for the indefinite future, looking into what your lender will offer as far as a modified payment plan is a great step but don't expect this to happen or for it to solve the problem.
If you have equity either through mortgage pay-down and/or through appreciation, look into downsizing your house or refinancing. Both options could be good options to help you for a more long term fix.
If you expect to be going to foreclosure, look into the rules and restrictions of dual tracking.
Overall, it's important to take action and not appear to be negligent. Start the process of discussing options by speaking to your lender. If you want to explore options of down sizing or refinancing and need an idea of what your house is worth in the current market, call me at (540) 246-9067.
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