Not Able To Pay Your Mortgage Payment? Terms to Know

Not able to Make Your Mortgage Payment? Terms to Know before Talking To Your Lender.

If you are struggling to make your mortgage payments, you may want to discuss your concerns with your lender. Below is a list of terms that may help you in your communication.

 Loan Modification: If you can prove you are upside-down in your current mortgage (you owe more on the home than you can sell it for), you might be able to get your current loan modified. Lenders have much more to lose by foreclosing and much more to gain from a loan modification

Short Sale: You may want to get out from under a property you can no longer afford, but you cannot sell it for enough to pay back all the money you owe on it. Lenders may be willing to accept less than they are owed to allow you to sell and walk away debt-free, but they will want to see a Comparative Market Analysis (call me and I’ll do the research and provide you with one) and copies of your taxes, bank statements, etc., before agreeing to such a proposition.

Short refinance: Like a short sale, a short refinance (short refi) calls for the lender to accept less than the full balance due on the loan, so you can refinance into new mortgage with a lower balance and lower monthly payments. Before agreeing to a short refi, lenders want to see a Comparative Market Analysis (call me and I’ll do the research and provide you with one) to make sure the property is truly worth less than what’s owed on it.

Principal forbearance: A principal forbearance is sort of a cross between a short refi and a loan modification, but the lender does not completely forgive the difference between what’s owed on the property and its market value. Instead, the lender agrees to collect the difference later – when you sell or refinance the property. Like a short refi, the new monthly payment is calculated on a lower principal balance (based on the property’s market value), resulting in a lower monthly payment.

The Comparative Market Analysis is key for establishing the property’s true market value.  It is important for you to contact your lender, to find out what your options are, but be sure to speak with the “Loss Mitigator” and not just a customer service rep. Please email or call me if you need a Comparative Market Analysis, and with this important information in hand, you will have a professional opinion of the current value of your property, which will assist you in your communications and negotiations with your lender. Amy Maier, Amy@AmySellsHomes.net or 303 660-8600.

The terms above are provided by Ralph R. Roberts who is a consumer advocate, spokesperson for Federal Loan Modification Law Center, host of KeepMyHouse.com, and author of numerous books, including Foreclosure Self-Defense For Dummies and Loan Modification For Dummies (Summer, 2009). Ralph is based in Sterling Heights, Michigan and can be reached at RalphRoberts@RalphRoberts.com.