Friday, September 22, 2006

Missed a Payment?

by Osman Parvez



Maybe we should stick with the foreclosure topic, given how many people worried about foreclosure.

Here's some good advice.

In Forbes magazine, "Nightmare on Elm Street," Carrie Coolidge writes,
While the statistics are frightening, there are alternatives worth exploring if you find yourself in the unwanted position of facing a foreclosure on your home. Indeed, if you have missed a mortgage payment, don’t wait for your lender to contact you. Rather, call your lender to let them know about your situation and ask for advice. Many lenders, including Washington Mutual (nyse: WM - news - people ), Citigroup (nyse: C - news - people ) and Bank of America (nyse: BAC - news - people ) are well equipped to offer advice and even help. CitiMortgage (a division of Citibank), for example, offers a hardship assistance program to qualifying customers who have suffered an illness, unemployment, divorce, death in the family, etc.
A lender may be able to offer a restructured payment plan or even refinancing. Depending on your situation, some lenders may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses, but you must be able to show that you would be able to meet the requirements of the new payment plan. Worse case scenario, if your home must be sold, ask your lender for some time so you can sell it yourself. If you reach an agreement with the lender, make sure you get it in writing, and have it reviewed by a real estate attorney or a local housing counseling agency approved by the U.S. Department of Housing and Urban Development.
Investigate thoroughly before you enter into any agreement with a third party, as there are plenty of scams out there, ranging from phony counseling agencies to cons who convince homeowners to sign over deeds in exchange for paying the monthly mortgage (called equity skimming scams). Indeed, there are scammers who will promise to help you, but will leave you in a worse mess than where you started. Phony counseling agencies will claim to offer you help in exchange for a payment, but what they offer may well be services you could do for yourself for free, such as negotiating a new payment plan with your lender or pursuing a pre-foreclosure sale

Image: cmiper




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