How to Get Mortgage Relief

Quite frequently I have a commenter ask me how they can get some relief on their mortgage because they are having trouble paying it, the interest rate is about to reset, etc. I don't know what to tell them exactly (I've never had this trouble) but here are the five steps MSN lists for getting mortgage relief:

• Step No. 1: Gather information. There are two keys to getting a workout: being able to explain why you're in trouble and what you can afford.

• Step No. 2: Call your lender. Most major lenders have workout departments that do nothing but talk to troubled borrowers. You can reach these departments by calling the lender number on your bill or by calling a hotline dedicated to workouts.

• Step No. 3: Fill out the paperwork.

• Step No. 4: Consider a contingency plan. If you don't qualify for a standard workout, all is not necessarily lost. If you think you've been unfairly denied, ask to speak to a supervisor or write the president of the bank a letter clearly and politely spelling out your case.

• Step No. 5: Ask about other options. Sometimes, when you don't qualify for formal relief, you can still get some sort of accommodation, like a short respite from payments that allows you to find a job or sell your house.

Of course, two ways you can get your finances back on track if you can't afford your mortgage are to make more money and save more money. I currently have hundreds of ways to do either of these (at the preceding link), so check it out of you're having mortgage trouble and are looking for ideas to get out of it (or even if you're doing well and want as big a spread as possible between your income and expenses.)

Comments

[thomas]

I just talked to my broker about refinancing, not because I can't pay, but to take advantage of the lower rates. Turns out I could save some on the monthly, but it would take 5 years to recoup the costs. not much of a deal for me.

[Neal F]

Serious question. A friend of mine - no its really not me - asked about getting relief even though he is able to make his payments. He reasons that the banks are striking workouts with others, why not with him? He is currently on an adjustable at 6% plus - with a pre-pay penalty. He told me that his plan is to stop making payments for a few months and then plead poverty with the bank to get them to deal. Do you have any experience or info or thoughts on this? I know nothing about this subject...

Thanks,
Neal

[staylor]

I have been trying since July to get mortgage relief to no avail, I was late paying my property taxes and my mortgage lender increased my monthly payment and has caused me to be late and behind with my payment, now i am afraid that I will be foreclosed upon. I have a seventy thousand mortgage and I have been unable to get relief. I tried to modify with my lender, I was denied because my hardship was not of a permenant nature. I would hope no hardship is permanent. When the financila industry was bailed out was permanent. What is really going I think they don't want anything the President does to succeed and it is going to be the fall of USA.