When you fall behind on your mortgage payments on your Portland home, it can feel like you’re drowning in debt.
Even if you are able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge.
Do not panic. There are a few options that can help you to prevent foreclosure in Portland and possibly even keep your house, even if you’re severely behind in payments. Numerous properties in Portland have been lost to foreclosure, but there are a handful of ways to avoid it.
Five Options to Consider When You Are Behind on Mortgage Payment
1. Negotiate with your bank:
Many lenders routinely offer some level of assistance. You have to work hard at it, but if you put your best effort to work with your bank, you might be able to get your interest rate reduced or a temporary reduction in your monthly payment size.
Most of the time, lenders will want to steer you to refinance your loan – but if you are a few payments behind, you might not qualify for a reduction in interest rate.
Negotiating with a bank can be an arduous task. It usually takes a great deal of calls and the patience of a saint to get through the bureaucracy. Keep calm at every meeting and correspondence. Ask for help from everyone you speak with, but don’t sound desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
If you are in need of a temporary fix and want to stay in your home, most banks can be forgiving. Sometimes they are willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to give them a lot more money in the long run. If they have to sell your house at a foreclosure auction, they would take a huge loss.
That sounds obvious, but for some reason, some bankers seem to forget it when saying no to someone in need of help.
2. Making Home Affordable (MFA):
Depending on the type of your mortgage, you might qualify for MHA. Any loans backed by Fannie Mae or Freddie Mac must be considered for MHA; other lenders may choose to participate in MFA.
With MFA, payments and/or interest rates might be lowered to make it more affordable for struggling homeowners. In rare cases, the principal balance might even be adjusted if the home is worth less than what is owed. If you are unemployed, you may be able to get your payments temporarily suspended or reduced.
MFA is a government program so be prepared to deal with plenty of paperwork. Remember, it is not free money – you have to work for it.
3. Reaffirm:
This may be a good card to play, however, it can come with some unseen penalties. Basically, reaffirming a loan is an additional commitment to pay. In some states where it is allowed, an affirmation can create additional liabilities if your property is auctioned.
4. Bankruptcy:
If you’re being crushed by massive debt, bankruptcy can be a good way to negotiate with many lenders at once. It is a lot of work, and it won’t help you avoid your mortgage. Different lenders will treat your circumstances in unique ways. You would benefit from serious professional help – the best you can afford. This is usually the tool of last resort; but it is a rising trend during troubled times when all other options are exhausted.
5. Borrow money from a private investor:
If you are behind on your payments and need to sell your property fast, we can help. In certain circumstances, we may even be able to help you stay in your home. We work with homeowners in Portland to find solutions to foreclosure problems.