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HOW REALTORS® CAN HELP
REALTORS® are in the business of helping people become homeowners and want to do everything they can to make sure you can afford to stay in your home.
• The best and least expensive option will often be working with the current lender (or the “loan servicer” hired by the lender to oversee your loan). Read more about your options on the next page.
• If your current lender isn’t willing or able to help, you may be able to refinance your current mortgage with another lender. REALTORS® can help you find responsible lenders
that make fair and affordable loans.
• To address the growing foreclosure problem, especially with subprime loans, some state and local governments and nonprofit organizations are offering financial assistance. Ask your REALTOR® or counselor about who to call.
• Counseling agencies are in the business of helping borrowers like you. Check out Counseling Resources for some ideas.
• Remember, you should shop just as carefully for a mortgage as you do for a car or anything else you buy. Getting the lowest possible rate and fees can save you many thousands of dollars over the life of the loan.
• Sometimes the only option is selling the home. Of course, no one is better at helping a seller than a REALTOR®. It is better to sell than go through foreclosure because it will be easier to qualify for credit in the future and buy another home.
• Be wary of advertisements like “Cash for Houses/Any Situation” or “We Buy Houses for Cash.” Consumer groups have learned that many of these are scams that bait homeowners with the promise of rescuing them from imminent foreclosure. Unfortunately, the “rescue” often involves the borrower signing over the house and the family being evicted from their home.
TALK TO YOUR LENDER
Talking to the lender, or “loan servicer” that collects the payments, should be one of your first steps. The earlier you call, the better your chance to work out a solution. Here are
some options:
• Forbearance. Lenders may let you make a partial payment, or skip payments, if you have a reasonable plan to catch up. Tell your lender if you expect a tax refund, a
bonus, or a new job.
• Reinstatement. Reinstatement refers to making a payment that covers all your late payments, usually at the end of a forbearance period.
• Repayment Plan. If you can’t afford reinstatement, but can start making payments to catch up, the lender may let you pay an additional amount each month until you are
caught up.
• Loan Modification. Your lender may agree to amend your mortgage to help you avoid foreclosure. The options include:
° Adding all the missed payments to the loan amount and increasing the monthly payment to cover the larger loan.
° Giving you more years to pay off the loan, lowering the interest rate, and/or forgiving part of the loan, to lower your monthly payment.
° Switching from an adjustable rate mortgage to a fixed rate mortgage, so you aren’t exposed to increases in your monthly payment.
° Requiring amounts for taxes and insurance to be included with your monthly mortgage payment so you
avoid big bills in addition to your mortgage.
• Sign Over the Property to the Lender in Exchange for Debt Forgiveness. This can hurt your credit, but is better than having a foreclosure in your credit history.
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