If financial circumstances aren’t working, and you are falling behind on mortgage payments, hoping the lender won’t notice isn’t a solution. Talking with them about loss mitigation options is better. Lenders may be able to arrange a “workout package” to help get things back on track.
Mortgage loans are often “sold”; the lender who is servicing the loan — the lender to whom you send checks — has the financial interest in your situation. Talk with that lender, not the original lender.
If Fannie Mae or Freddie Mac — both government-sponsored enterprises involved in mortgage lending — have acquired your loan, there are Federal guidelines that they may apply to your situation. They are not there to deal directly with borrowers (you), but they may be able to work with the lender of record to determine the loss-mitigation guidelines that best fit your situation.
Be vigilant about companies that “just want to help”. Look out for:
- Financial counseling agencies with high fees; they may be charging for advice you can get for free.
- ‘Equity Skimming’ — companies (or individuals) who offer to repay the mortgage or sell the property if you sign over the deed.
And do not sign anything related to your home until you understand it thoroughly.