Currently, when a home owner falls at least 30 days behind on a payment, the bank will start their action plan. The first thing they might do is to order a BPO or broker price opinion. The homeowner will not even know about this but a qualified professional (someone like myself) will drive by the home, take a few photos and then assess the current value of the home. By this time the home owner has been fielding annoying phone calls for about two weeks from the mortgage company. They want to know when they can expect a payment to be made. This is the time to call or contact me about ways to solve the problem.

If you act early in the process it may be possible to modify the loan with the mortgage company. To do this, the home owner must prove that they have good reason to be behind in their payments. Financial statements, pay stubs and all bank statements from the past 3-6 months are then provided to the lender. No lender will approve a loan mod if the borrower has any liquid assets that could be used to pay the payment. This means if you have stocks, bonds or cash not in an IRA or 401K, you need to just go ahead and keep paying. Using the excuse of “my neighbors are not paying so why should I” is not an excuse.

The next and really best option is to put the home on the market for sale and attempt to get an approved short sale done. Most banks are getting better at approving short sales for home owners in distress. Be sure to contact an experienced short sale Realtor that knows how to get the transaction completed. There is much more to a short sale then just getting it under contract with a low price. Having an agent that understands the process is half the battle!

The final thing to do if the above two options have failed or are not possible, is to wait for the foreclosure to occur. As soon as hte sale has happened, the home owner or tenant will have a visit from the listing agent that will be handling the REO listing for the bank. This agent will make an offer of CASH or the occupants to vacate the property. We REO agents call this Cash For Keys or Financial Relocation Assistance. The home owner or tenant must sign a form stating that they agree to move out on a specific date (usually fairly quickly), leave the property in broom-clean condition and then a check will be presented as compensation to the tenant or former owner. Tenants may have the right to stay for up to 90 days if they can provide a copy of their current lease. No rent is paid and the cash offer still applies.

The best thing to do when having trouble with house payments is to make an action plan and contact me for assistance. I specialize in helping distressed home owners solve their mortgage problems. I have seen many different situation and problems get solved but it takes the initial contact to get things started. I have found that the home owners stress level is greatly decreased when I can offer my assistance. Contact me now if you are facing this problem. I am here to help!

Stay calm, don’t panic. It’s not the end of the world. These days you are not alone. The key is to make a plan of action before the situation goes any further.

Assess the situation

First of all, why are you late? Have you lost a job or had a major life change? Did you just have a major expense this month that left you cash poor? If a major life change has occurred, you need to get serious. Most likely a loan modification will not help you or may not even be allowed by your mortgage lender. It’s funny–you can call the lender and they will claim to want to help you but they will say “you don’t make enough money to be able to modify the loan.” Your reply will be “if I had enough money, do you think I would be making this call?” At that point you have to realize that trying to modify the loan is not the way to go. I recommend selling the house as soon as possible. This may be emotionally painful I know but it will cause much less heartache in the long run. Short term, it will be painful but that is where I come in. Much of what I do is help you manage the stress of selling your home and moving to a new place. A short sale can be a tool to get the home sold and avoid foreclosure.

What about the rest of your debts?

If you are behind on a mortgage payment, this is a good time to review the rest of your debts. Do you have too many car payments, credit cards etc.? It could be worth it to start to liquidate unneeded big ticket items in your possession. Remember, they are just “things” and “things” can be replaced. It is amazing how quickly you can raise cash by selling things on Craigslist.

Use Foreclosure ONLY as a last resort!

Foreclosure is death to your credit score. Period. End of story. Don’t let that happen intentionally. I see many people who just mentally check out of the situation and live in a state of ignorance. They somehow think that the problem will go away. They act like they had no idea that they lost their home when I show up with the sheriff and a moving crew on eviction day. If only they had called a professional, they could have been helped.

People are under the impression that you can not make payments and live for free for a long time. This will depend on your lender and their tolerance for non-performance of their loan portfolio on any given day. Usually, when someone misses one payment, the bank will order the first BPO (Broker Price Opinion) and begin the process toward foreclosure. The key is for the borrower who thinks they might be headed for real trouble to take action. Living in denial will not help you. It is inevitable that the home will be lost. Better to have a plan and avoid the stress and heartache.

If you are behind in payments or think you soon might be. Please contact me right away. I keep all of my conversations with you totally private. There is no cost for a consultation. We can make a plan to save your credit, your sanity and your time if you will only take some action.