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Your Mortgage Loan: Saving Your Home 101

[Jul 8, 2009.]


A recent article in the Las Vegas Sun highlights problems homeowners encounter when when attempting to get assistance with their mortgage loans.  Adding to the difficulties of contacting and dealing with mortgage loan servicing companies  are myriad middleman entities that have sprung up offering to help distressed homeowners get what they need from their lenders--refinancing, modification of their loan terms, or approval of a preforeclosure sale (aka short sale.)

Approaching Mortgage Lenders

Homeowners who cannot make mortgage payments need to seek help immediately. foreclosure law is governed by state laws and time frames can vary considerably. Before contacting lenders, homeowners should know whether they plan to keep their home or sell it, and have the following information handy:

  • Mortgage loan account number (found on monthly statement or payment coupon)

  • Reason for falling behind on payments: unemployment/ illness? unexpected expenses or emergency? lenders typically assist owner occupant homeowners who are experiencing circumstances beyond their control. Be prepared to provide proof of hardship.

  • Gross income for past two years as shown on income tax returns.

  • Monthly housing expenses, other debts and living expenses.

Your mortgage may be owned by a "behind the scenes" company such as Fannie Mae or Freddie Mac that pay loan servicing companies to manage their mortgage loans. Homeowners can use the above websites for determining if their mortgage loans are owned by Fannie Mae or Freddie Mac.

Modifying Mortgage Terms Provides Relief

Loan modifications are available to many homeowners through the making home affordable program. Using a mortgage calculator can help in determining savings by reducing mortgage rates through modification. Other mortgage terms that may be modified include extending the repayment term and reducing the mortgage balance. Lenders may also agree to adjust the payment due date and add unpaid interest to the mortgage balance, but this can depend on current home value and home equity.

Choose Mortgage Help Carefully

Unfortunately, large numbers of foreclosures and increasingly desperate homeowners have brought out the scammers. Homeowners unable to contact their mortgage lenders directly can get help by contacting a credit counseling company through NFCC or a housing counseling service approved by the US Department of Housing and Urban Development (HUD). Homeowners can talk with a certified credit counselor and learn about options for avoiding foreclosure. Foreclosure is a matter of public record, and can lead to unsolicited offers of help. Consumers should be wary of unsolicited offers of help; offers requiring cash up front or transferring title to the home involved can lead to trouble.

Homeowners who must sell their homes should contact local real estate professionals for a home value estimate and marketing information. Many real estate offices have short sale specialists that can help in negotiating a short sale with mortgage lenders.


About Author:

Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.

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