You took out your Boston area mortgage loan a few years back when both you and your spouse were working and things were going pretty well financially. In fact, that’s the reason you bought your first home. Since then, the economy has slowed considerably and your employer has downsized. Over time – which was an almost guaranteed addition to your budget for a few years – is now a thing of the past thanks to the company’s new management. While your income has dropped considerably, your obligations continued – especially those to your Boston area mortgage loan institution. So, what do you do? What can you do? Let’s take a look at how an honest, proactive and direct approach with your creditors can work to your benefit when times get tough.
Most credit counselors, financial experts and creditors say the best possible thing you can do is to contact them in writing as soon as you experience a hardship affecting your ability to pay your mortgage. You may not want to divulge your entire situation to the mortgage company – they may not want to hear that you will never be able to make another payment, for example – but in all seriousness, be open and honest about your current status.
The best course of action is to take charge and let your creditors know immediately, or at least sooner rather than later. The longer you hold off doing so the worse your situation will likely become. If you procrastinate too long, the outcome can be removed from the hands of people that may be able to help and transferred to the proverbial “home office” or some other nebulous entity who thrives on red tape and double-speak. Remember this: Don’t make the erroneous assumption that you are out of options and your creditors won’t work with you. Most will, but you’ll never know until you ask them.
Do your homework.
If you’re a homeowner and have already missed a payment on your Boston area mortgage loan, seek assistance from your lender as soon as possible. There are laws now called the “rules restricting dual tracking.” Dual tracking is the process whereby a mortgage loan servicer (the arm of the mortgage company who’s responsible for collecting your payment and accounting for it each month) forecloses on a home while simultaneously entertaining a mortgage loan modification by the borrower. The Consumer Financial Protection Bureau (CFPB) wrote the law in 2013 to prohibit lenders from dual tracking within a 120-day period after a mortgage loan default. The rule allows greater protection for borrowers going into, or already in, the throes of foreclosure proceedings. Plus, the law has teeth – violators are subject to damages, and that may give borrowers necessary leverage for favorable consideration in a foreclosure lawsuit – if and when it that time comes.
Explore all available options.
Boston area mortgage loan experts say there may be programs available in some states that will make mortgage payments for homeowners. In 2010, the Hardest Hit Fund (HHF) was designed to assist borrowers struggling to make their monthly payments. The assistance was created in an effort to stave off foreclosure and return economic stability into some neighborhoods. While not available in every state, the states that do provide the HHF assistance concentrate their efforts on two groups of homeowners: Those who are unemployed and are looking for a new job, and borrowers who are “underwater” on their mortgage. These homeowners owe more on their mortgage loan than their home is worth.
Be realistic in your expectations.
As mentioned above, most creditors will try to work with you in times of hardship. However, they don’t have to. Just because you’ve called your mortgage lender and have been honest about your financial situation, they aren’t required to provide you leniency – especially if there are extenuating circumstances such as chronic or recurring delinquencies, or other strikes against your credit report. Just remember that all you can do is ask for assistance – what the lender may or may not do is up to them. You signed a note and mortgage promising the lending institution you’d repay them each month, every month and on time.
Take the bull by the horns.
Be proactive with your financial problems – even if you think they are just temporary. By not doing anything or ignoring your situation with a creditor – especially a Boston area mortgage loan company – the lender may assume you don’t care about your financial responsibility or your promise to repay the money they loaned you. We’re talking about your home, here, so the last thing you want your mortgage company to think is that you don’t care about losing your home.
Since the housing crash of less than a decade ago, mortgage lenders have become more willing and able to work with borrowers who become delinquent, but it’s also a proverbial “two-way street.” The lenders should know if you need and want help, and if they aren’t aware of that, they naturally assume the worst and take the necessary steps allowed them by law to recover their collateral.
The worst thing you can do.
The very worst thing you can do is to do none of the suggestions mentioned above. One of more of them can hamper or eventually cripple your chances for a successful outcome if you fall behind in your payments. By law, mortgage companies can’t and don’t wait “forever” before they begin certain procedures designed to protect the lending institution from their borrowers defaulting on their mortgage loans. Remember, most all mortgage lenders are regulated and overseen by the federal government. As such, banks and other lending institutions have policies and practices that are nearly always uniformly followed – if that bank or lending institution wants to remain in compliance with the federal guidelines. Most do, of course, because failure to do so will result in fines, penalties and – in severe cases – shutdowns or forced acquisitions. No lending institution’s board of directors wants that to occur.
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