Understanding your situation
One of the biggest hurdles to overcome when you are having difficulties with your mortgage is knowing where to start. Below is a list of steps you should consider.
Step 1
If you are behind on your mortgage payments or any other property related expense (i.e. property taxes, insurance, HOA fees, etc), or anticipate that you may not be able to continue making your payments, call a local housing counselor to discuss the best course of action. Housing counseling is a free resource.
You can find a list of in-state housing counseling agencies here. Don’t wait! The longer you delay, the fewer options you will have, and the more likely it will be that you will lose your home. Act now!
You may also go directly to the Homeowner Assistance Fund Portal, accessible from this website, to apply for assistance.
Step 2
When you talk with a housing counselor, you will need some information ready to begin the discussion. Here’s what you will need to get started.
- Your latest mortgage, property tax, or association statement or payment coupon.
- The mortgage documents you received both before and at the closing of your mortgage loan.
- All correspondence you have received from your mortgage servicer, municipality, or association regarding your payment history.
- Copies of pay stubs for all the income earners in your household.
- Information regarding your monthly household expenses.
Step 3
Be realistic in your expectations.
There are many variables to be considered in each situation, such as whether your financial difficulties are short-term or long-term and how far behind you are in your payments.
Some families who act early and are in a position to accept the terms of any modification agreements reached with their loan servicer can successfully save their home from foreclosure. Unfortunately, the financial situation of some families may not allow them to remain in their home. There may come a time when you need to make some difficult decisions regarding your own situation and whether you can afford to remain in your home.
Avoiding Foreclosure
Contact your lender as soon as you realize you have a problem. If you are worried about making your payment a couple of weeks later than usual, you should immediately let your loan servicer know when you will be making the payment. Make sure the servicer has documented the anticipated date you will be making the payment. Lenders do not want your house. They have options to help borrowers through difficult financial times. If you do not have your servicer's contact information, contact a housing counselor for free assistance.
Take the following steps if you are unable to make your mortgage payment:
Don't ignore the problem
The further behind you become, the harder it will be to bring your loan current and the more likely that you will lose your house.
Contact a housing counselor
Housing counselors can help you understand the process and your options, organize your finances and assist you in working with your servicer. Click here to find a housing counselor in your area.
Open and respond to all mail from your servicer
The first notices you receive from your loan servicer will offer good information about foreclosure prevention options that can help you have a positive outcome. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse later in the foreclosure process. Keep every piece sent to you so you can get it to your housing counselor.
Know your mortgage rights
Locate your loan documents and read them to try to get some idea as to what will happen if you are unable to make your house payments. You may want to contact a housing counselor because you could have several options. Do not be afraid to ask what the mortgage loan documents mean. A housing counselor will be able to explain what is in the loan documents, as well as explain the foreclosure time frame in New Hampshire. Be sure to take these loan documents with you when you see your housing counselor. Make certain you understand everything explained to you.
Understand foreclosure prevention options
Your housing counselor has valuable information about foreclosure prevention, including information on loan modification and short sale options. Make certain you understand these options when they are explained to you by your housing counselor. If you do not understand it the first time, do not be afraid to have it explained again. Many of the concepts are difficult to understand.
Save every nickel
If you are behind and the servicer is no longer accepting payments, save as much as you can. You may qualify for assistance if your situation improves and if you are able to contribute funds to “cure” some of the arrearage (missed payments). You may need to hire an attorney or pay for rent if you don’t qualify for any options.
Prioritize your spending
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses - cable TV, memberships, entertainment - that you can eliminate. You may want to delay payments on credit cards and other "unsecured" debt until you have paid your mortgage. Your housing counselor will help you put together a spending plan. It will be a “crisis spending plan” initially. Once you are able to get some cash together to start paying back your delinquent payments, you and your housing counselor will develop a more stable spending plan together.
Use your assets
Do you have assets - a second car, jewelry, whole life insurance policy - that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate you are willing to make sacrifices to keep your home. Your housing counselor will give you more tips on how to tighten your spending.
Avoid scams
You don't need to pay fees for foreclosure prevention help - use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they may charge you a hefty fee (often two or three months' worth of mortgage payment). A HomeHelpNH counselor will provide the same information and services for free. New Hampshire law also provides protection to consumers from misleading foreclosure counseling services. See the Beware of Scams page on this site. It has more information on how to avoid scams. If you fall victim to a scam contact legal services for advice.
Understand documents before you sign them
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms. If there is any doubt at all, get assistance from a local housing counselor or from a local attorney. More detail about Rescue Scams can be found here.
Don't ignore the problem
The longer you wait to get help, the harder it will be for your housing counselor or your lender to assist you. Losing your home may be the price you pay for thinking something will come along to fix everything. Action is what will make that happen.
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