Posted on 9. July 2010 05:53 by qmiskini

In the Disney classic animated film Snow White, the 7 Dwarfs sang "Hi-ho, Hi-ho, It's off to work we go..." In today's chaotic, stressful economy not only is that refrain becoming rare, but as more and more families experience job loss and cut-backs, making the monthly mortgage payments becomes harder and harder. Many families,though not yet behind on their payments are in eminent default - just one or two payments away from not having the resources to pay their mortgage.

There are a variety of alternatives for those in eminent default or who have already stopped making payments and are in default.  If you are not yet in default, not behind on your payments, have an interest payment on your loan that, if lowered could help you make those payments, meet with a qualified loan officer about re-financing your current home loan with a lower interest rate in order to lower your monthly payment. This is a good the first step. But if you do not qualify for refinancing and have already begun to fall behind, speak directly with your current lender about how to qualify for the Obama Administration's Making Home Affordable Program (known as HAMP,) designed to help you modify your current home loan (called loan modification) to make your payments more affordable. Several hundred thousand loans have been modified since the program's start. It's tricky and you have to keep up with the demands of the lender as well as the messy process of completing the modification, but worth it if your goal is to find a way to make payments and keep your home. 

If you already know there's little or no hope of keeping your home because financial recovery is not in the immediate future, then utilizing the the process called Short Sale can be a method of selling a home you can no longer pay for and that may also, in this depressed real estate economy, be worth less than you currently owe. The HAFA program, which is part of the Making Home Affordable Program can help.  But to sell the home, you'll need the help of a Realtor who is experienced in the Short Sale process which involves a number of additional steps and processes not usually associated with the sale of a home.  If there is more than one lender associated with the home, the process doubles (or if there are three lenders - triples.) Short Sales are long, sometimes complicated processes involving both selling the home to a new Buyer and working with your current lenders to gain their approval of the Short Sale and all the details that follow.

In any case, the one thing you should NEVER do is NOTHING.  If addressed early enough in the process, any of these options, re-financing, loan modification or short sale are preferable to waiting until you are facing foreclosure.