More Foreclosure Options
Several options are open to you if you get behind on your mortgage:
Changing Your Mortgage
- Reinstatement: Lenders are always 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: Lenders 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 may be an option. 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
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. This option is applicable for Federal Housing Authority, Veterans Affairs, and insured conventional mortgages.