If you simply can not afford your mortgage loan you should act fast. What to do when you don’t want to be the upcoming foreclosure next door! After all don’t you see the houses in foreclosure around you? So here is what to do when you can’t afford to pay what the mortgage lender wants you to pay!

1. Presents:
Six Ways To Avoid Foreclosure When You Can’t
Afford Your Mortgage Loan

2. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
If you simply can not afford your mortgage
loan you should act fast. What to do when
you don’t want to be the upcoming
foreclosure next door! After all don’t you
see the houses in foreclosure around
you? So here is what to do when you can’t
afford to pay what the mortgage lender
wants you to pay!

3. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
1. Contact Your Lender
A lot of people lose their homes to foreclosure out of sheer denial.
Unfortunately, ignoring a foreclosure notice will not make the problem
go away. In fact, the longer you wait, the more you reduce the options
available. That’s why as soon as you run into trouble with paying the
mortgage, you should contact your lender to see if you can work
something out.
According to the U.S. Consumer Financial Protection Bureau, you
should be prepared to discuss why you can’t pay the mortgage,
whether the situation’s only temporary and details about your income.
For lenders, helping a borrower keep the home can be a best-case
scenario, especially at a time when the market may already be flooded
with other foreclosed properties. You can also contact the Consumer
Financial Protection Bureau to talk to a housing counselor about your
options.

4. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
2. Refinance
Refinancing a home can be an option, but only for
buyers who aren’t already stretched to the max. For
example, if you’re on track to pay off your mortgage
in 10 years, you could extend the amortization of the
loan, thus making the payments smaller.
Keep in mind, however, that refinancing often
includes some pretty hefty fees (for breaking your
existing mortgage contract), and may also cost you
more in interest over time. For those who are already
overextended on the loan, refinancing may not be an
option at all.

5. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
3. Apply for a Loan Modification
A loan modification is when a homeowner works with a lender to
change the terms of the mortgage loan. This could mean a
temporary or permanent change to the mortgage rate, term and/or
monthly payment. This option is similar to refinancing, but it’s only
open to those who can prove they’re facing great financial
hardship — and who are willing to advocate for themselves to a
lender that is probably receiving many other similar requests.
This option is part of the Making Home Affordable Plan, which
was designed to help offset some of the dishonest lending
practices that left many homeowners in the lurch. However, it may
take many months for borrowers to be approved for this program,
so it’s hardly a quick fix. Plus, it’s only open to homeowners
whose first mortgage originated before January 1, 2009, and
whose unpaid balance on the mortgage is not more than
$729,750. You can look into whether you qualify here.

6. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
4. Get Rid of Your House
Sometimes the best way to avoid foreclosure is to sell your home. The best way to do this is to list
it the traditional way. Unfortunately, falling real estate values have taken that option away from
many people whose mortgages are bigger than the market value of the property. If that’s the case
for you, there are two key options:
Short Sale: This is when the bank agrees to let a homeowner sell the home for less than they owe
on the mortgage. The catch is that, as you can imagine, lenders aren’t thrilled about the idea of
taking less than what’s owed to them, and it’s up to the lender to decide whether allowing a short
sale is in their best interest. This option may not be as damaging to the borrower’s credit as a
foreclosure, but that’s only true if the creditor doesn’t report the debt reduction to credit reporting
agencies.
Deed in Lieu of Foreclosure: In some cases, a lender will allow a struggling homeowner to sign
their deed over to the bank instead of suffering a foreclosure. In this case, the borrower essentially
turns the home over to the lender, who can then sell the home to recoup what they’re owed.
Not that both deed in lieu of foreclosure and short sale can have tax implications. Therefore,
homeowners should consult with an HUD-certified housing counselor as well as a tax professional
to determine the full implications of this move.

7. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
5. Declare Bankruptcy
Bankruptcy is no picnic. It’ll destroy your credit and
make it hard for you to borrow any money from
anyone for many years. Plus, depending on what
type of job you hold, a personal bankruptcy can
even be a bad career move. That said, in a
Chapter 13 bankruptcy it is possible for owners to
keep their homes, but only if they have a solid plan
to repay at least some of their debts. Unlike
Chapter 7 bankruptcy, Chapter 13 requires that
borrowers make an attempt to repay some of what
they owe before the slate is wiped clean.

8. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
6. Walk Away
During the height of the foreclosure crisis,
lenders faced a phenomenon they came to refer
to as “jingle mail.” Owners who could no longer
make their mortgage payments and had little or
no equity in the property would send their keys
to the lender and walk away from their homes.
For those who are upside down in their
mortgage and who’ve been unable to work
something out with the lender, allowing a
foreclosure to happen may be the only choice.

9. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
In recent years, many borrowers in default have managed to stay in their homes for
months or even years without making payments. That’s because completing a
foreclosure takes more than a year, on average, in the U.S. Plus, if borrowers choose
to fight their eviction in court, they may be able to stay even longer while the case
works its way through the system. Some people will argue that this just isn’t fair, while
others feel it’s the only choice they have.

10. Six Ways To Avoid Foreclosure When You
Can’t Afford Your Mortgage Loan
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