What to do about your Mortgage if you lose your Job
For a while now, Alaska has been shedding jobs in the oil and gas industry but the experts say the unemployment rate of 6.6 percent is now holding steady. While that is significantly higher than the rest of the nation, we’re happy to see it stop sliding downward.
If you are among the unfortunate who have lost jobs and feel that you can’t make your mortgage payments, don’t panic. While you decide on the next step to take, keep the following in mind.
Don’t hide from your lender. Gather up all your bills and figure out exactly where you stand financially. Know how much money is coming in every month, how much you owe to others and where you can make cuts in your budget.
Once you are clear on your financial situation, contact your lender and make a proposal. If your situation is temporary ask for a forbearance until you are back on your feet. This is an agreement between yourself and the lender in which it promises not to exercise its right to foreclose on your mortgage and you agree to a plan in which you will come current on your payments over a certain time period. Again, this is only for a borrower in a temporary financial crunch.
If, after going over your budget you find that you can make smaller payments, ask the lender for a five-year loan extension. This will naturally reduce your monthly loan payment. Not all lenders are willing to make such an extension, in which case you’ll need to think about more drastic options. These include asking the lender to consider a deed-in-lieu of foreclosure, a short sale, mortgage modification and even bankruptcy.
Keep Your Money
Although we’ve come a long way in mitigating the foreclosure-avoidance scams of the past, they do still exist. Don’t give money to anyone who says he or she can help you avoid foreclosure while you’re unemployed. There is a lot of low-cost help out there and some programs are even free.
The Homeownership Preservation Foundation (HPF) is nonprofit organization that operates a toll-free hotline (1.888.995.HOPE). You can call this number 24 hours a day, seven days a week for free, personalized assistance. The United States Department of Housing and Urban Development (HUD) offers free foreclosure avoidance counseling services in Anchorage through Money Management International. Call them at 866-232-9080.
The most important thing you can do when you lose your job and fear you may be facing foreclosure is to examine all of your options and choose the best solution for you and your family.