Avoiding foreclosure

Losing your home is one of the worst things that can happen. If you are having trouble making your mortgage payments, there are several solutions that can help you avoid foreclosure. Some of them change the terms of your loan, either until you get back on your feet or even forever. Other solutions require you to give up your home to avoid more debt. The earlier you work with the lender the better, since negotiating a workable deal becomes increasingly difficult as time passes and arrears add up. Below are some loss mitigation options:

• Pay arrears, become current on the loan. You agree to pay the lender the entire past-due amount, plus any late fees and/or penalties, by a certain date. This option may be right for you if paying your mortgage is a temporary problem. This is also called reinstatement.

• Work out a period of loan forbearance. Loan forbearance means that the lender agrees to temporarily reduce or suspend monthly payments for a period, like six months. At the end of the forbearance period, your regular mortgage payments start again, and the missed payments are added on. This is good if you just need short-term relief.

• Loan modification. The lender agrees to change the terms of the mortgage loan so that you can afford to make payments. For example, you make the term of your mortgage longer, you lower the interest rate or recalculate your payment schedule.

• Refinance with another lender. Another lender may agree to refinance your mortgage. There are also some federal government refinancing options.

The nationwide network of HUD participating housing counseling agencies can help by providing the answers you need to make informed housing decisions.

Mathew Joseph is a real estate tax consultant. He can be reached at 929-393-5773 and realtorplus1@yahoo.com.

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