If you are experiencing difficulties making your mortgage payments, you are encouraged to contact your lender or loan servicer directly to inquire about foreclosure prevention options that are available. Many people avoid calling their lender when they have money troubles. Most of us are embarrassed to discuss our money problems with others or believe that if lenders know we are in trouble, they will rush to collection or foreclosure.
Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems.
Lenders have workout options to help you keep your home. However, these options work best when your loan is only one or two payments behind. The farther behind you are on your payments, the fewer options are available.
Do not assume that your mortgage problem will quickly correct itself. Don't lose valuable time by being overly optimistic. Contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.
HUD has a network of HUD approved Housing Counseling Agencies that can advise you. They have extensive training and lots of experience helping other people in similar circumstances. You can find Utah area HUD approved Housing Counseling Agencies that specialize in helping homeowners with mortgage trouble here.
First and foremost, if you can keep your mortgage current, do so. However, if you find that you are unable to make your mortgage payments, you may qualify for a loan workout option. Check with your lender to find out which of these options (or others) may be available.
Other Assistance Options include:
Reinstatement: Your lender may be willing to discuss accepting the total amount owed to them in a lump sum by a specific date. They will often combine this option with a forbearance.
Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time after which another option must be agreed upon to bring your loan current. A forbearance option is often combined with a reinstatement when you know you will have enough money to bring the account current at a specific time in the future. The money might come from a hiring bonus, investment, insurance settlement, or a tax refund.
Repayment Plan: You may be able to get an agreement to resume making your regular monthly payments, in addition to a portion of the past due payments each month until you are caught up.
If it appears that your situation is long-term or will permanently affect your ability to bring your account current:
Mortgage Modification: If you can make the payments on your loan, but you do not have enough money to bring your account current or you cannot afford the total amount of your current payment, your lender may be able to change one or more terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways:
- Adding the missed payments to the existing loan balance.
- Changing the interest rate, including making an adjustable rate into a fixed rate.
- Extending the number of years you have to repay.
Claim Advance: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor to bring your account current. The repayment of this loan may be delayed for several years.
Getting Assistance Talking to Your Lender -- If you are experiencing difficulty communicating with your mortgage lender or servicer about your need for mortgage relief, there are organizations that can help by contacting lenders and servicers on your behalf.
For an FHA-insured loan
Your lender has to follow FHA servicing guidelines and regulations for FHA-insured loans. If your lender is not cooperative, contact FHA's National Servicing Center toll free at (877) 622-8525, or via email. Whether by phone or email, be prepared to provide the full name(s) of all persons listed on the mortgage loan and the full address of the property including city, state and zip. We may be able to help you more quickly if you can also provide your 13-digit FHA case number from the loan settlement statement.
For a VA-insured loan
Visit the VA Foreclosure Alternatives page.
For conventional loans
If you have a conventional loan, first talk to a HUD-approved housing counselor at (800) 569-4287. They may be able to help you with your lender. You can also contact HOPE NOW or call the Homeowners Hope Hotline at (888) 995-HOPE to ask for assistance in working with your lender.
Still have questions? Contact us.
Call the Utah HUD Office at (801) 524-6070 or write to UT_webmanager@hud.gov.