Sometimes, the easiest thing to do it walk away. But when you go so far as to walk away from your house because you can’t make mortgage payments, you could be leaving behind more than your home. You could also be leaving behind the equity you’ve built up.
INB’s home preservation team is surprised by the people who don’t take the option of selling when they can’t afford their home any longer. As one preservation specialist told me, “Selling is a last resort, but it can put money in someone’s pocket when they need it.”
INB’s team in Springfield recently worked with a brother and sister tying up their mother’s estate. Though they initially tried selling her house, the first offer didn’t go through. They were ready to just let INB take the property. Instead, we helped the siblings by connecting them with a realtor who, in just a short time, received five offers on the house. After the sale, each of the kids walked away with $10,000.
Don’t Let It Get to That Point
Now that’s just one example, and we hope customers never get to the point of considering selling their homes because they can’t make the payments. Instead, we want mortgage clients to connect with us right away so we can help find a solution.
Essentially all mortgage payments through all financial institutions are due the first of the month (there are a few exceptions). Customers have until the 15th to make the payment with no penalty. After the 15th, they’ll incur late fees. We will also call to learn when we can expect payment. If a loan is 30 days late, we can report it to the credit agencies, which can reduce a credit score. Since many of my customers strive for a good credit score when they apply for a loan, I hate seeing “dings” like this.
To avoid a drop in a score, always start by calling me or your INB mortgage lender when you know you’re going to have trouble with a payment. We’ll put you in touch with our home preservation staff who can walk you through your options. If you have a hardship, we can explore mortgage assistance like a repayment plan or loan modification. We can even direct you to the U.S. Department of Housing and Urban Developments support network. On top of great digital resources, there’s even a 24-hour a day, 7 day a week hotline at 1-888-995-4673 (HOPE). HUD offers this service for free, so there’s no need to pay for help when you are struggling financially!
Another free resource is the Consumer Financial Protection Bureau. Call 1-855-411-2372.
Mortgage Assistance for Every Situation
Typically, people have temporary financial hardships. They catch up on the payment amount, and we just move forward.
Sometimes, these hardships are longer lasting, like those created by the pandemic. In these situations, customers may need a forbearance plan. Forbearance allows all payments to stop during the hardship, and all missed payments are due at the end of a specified period.
Repayment plans work if someone misses a few payments, but can afford to pay more than a monthly mortgage payment to catch up. Repayment plans are usually for two to six months, but may be longer.
If a customer can no longer afford your payment, a loan modification may be the best bet. With some modifications, we’ll require a three- to four- month trial before the loan is officially modified.
If a customer decides they can no longer afford a mortgage payment, options include:
- A short sale. This method is used when you owe more on the mortgage than the house is worth.
- Deed in lieu of foreclosure: You relinquish ownership of the property in exchange for relief from some or all of your mortgage debt.
Important Dates When Considering Payment
As soon as you think you can’t make your payment, contact INB at 1-877-771-2316. Here are steps we will take
- At 16 days past due, we will call you to see if the payment was simply forgotten or if there is another issue.
- At 30 days past due, we may report you to credit reporting companies as delinquent on your loan.
- At 36 days past due, we must attempt to contact you by phone.
- At 45 days past due, we will send you a written notice.
- At 121 days past due, we’ll begin foreclosure if you have not taken any steps to make your payments. At this point, you’ll be liable for attorney fees even if you make all your missing payments.