There are many reasons homeowners fall behind on their mortgage payments. A job loss, decline in income, change in marital status, or medical emergency can strain your finances to the brink. Catching up on your mortgage loan may seem impossible, but it isn’t. Here are some affordable ways you can avoid the consequences of foreclosure.
- Forbearance – Contact your lender as soon as you struggle paying your mortgage. With forbearance, your loan is put on hold, but this is only temporary. Your lender can suspend/reduce payments for a specified time if you agree to resume installment payments thereafter or pay what you owed during that time in a lump sum. Forbearance can prevent delinquency and is suited for homeowners with short-term financial difficulties.
- Repayment Plan – If your financial problems have been resolved and you can take on higher monthly payments, this can work for you. The plan involves making your regular monthly payment amount plus part of what you missed, until the late payments are settled. Resolving back payments in a lump sum can reinstate your loan, although loan reinstatement can come with hefty fees.
- Loan Modification – A loan modification is essentially a new loan. It provides you with a lower interest rate or a longer term, or payoff period. By working with your loan servicer, they can assess your financial situation to determine what you can afford. Proof of financial hardship is often required. Loan modification brings your loan current; although it requires some underwriting, it is a relatively affordable way to get current on your mortgage.
Ready for new beginnings? If you are staring down debt or need guidance with a delicate financial matter, don’t hesitate to contact the loan modification and foreclosure attorneys at OakTree Law: 562.219.2979
At OakTree Law, we work with homeowners who are unable to meet their mortgage payments. Our loan modification attorneys in Los Angeles and Orange County can help by explaining every option that is open to you. We can work with you in modifying your existing loan agreement and taking the appropriate steps to improve your overall financial situation.
- Reduce the Principle – If you’re underwater, or owe more than what your home is worth, a loan servicer can reduce the loan principal. You need to work with your lender or loan servicer to see if they will reduce your principal. Homeowners are less likely to make payments and stay in a house that is underwater, which is why servicers are often willing to help.
- Find Affordable Ways to Keep Your Property – Homeowners may fall behind on mortgage payments that are too high. To mitigate your hardship, look to manage expenses such as property insurance by shopping for lower-priced policies. Also, try looking into property tax abatements available in your local area, or examine your equity to determine if there’s enough to cancel your private mortgage insurance (PMI).
- File a PMI Claim – You might not need a full claim to catch up with your lender. A partial PMI claim can be enough to pay them an amount equal to the missed payments, which can avoid foreclosure. The late payments are then settled and part of your loan moves to the back of the mortgage.
OakTree Law can make the process affordable by evaluating your mortgage and challenges, accurately documenting your hardship, and gathering the paperwork needed to negotiate more favorable terms with your mortgage holder. Our foreclosure attorneys can help make your payments more manageable, reduce your debt, or find other options if you don’t qualify for loan modification.
Ready for new beginnings? If you are staring down debt or need guidance with a delicate financial matter, don’t hesitate to contact the loan modification and foreclosure attorneys at OakTree Law: 562.219.2979 – or – submit a request for a free evaluation.