What Can I Do If I Fall Behind In My Mortgage Payments?
As a Realtor and Certified Distress Property Expert (CDPE), one of the things we do is assist homeowners who find themselves in financial distress. About 25 percent of the people we work with are facing this challenge.
Our job is to provide essential guidance at a critical time and focus on the best strategy to meet our clients’ needs.
Whether the goal is to keep a home or sell it, we are here to help educate the client on his or her options and link up our client with the people and resources that best suit his or her objectives during this time.
Here are a couple of key steps to help get through this process:
Step 1. Determine exactly how many months you are behind with the bank(s) plus all penalties, fees and taxes. I recommend you put all bank correspondences and documents in a box and keep a call log of all communications you have with your bank including names, dates and times.
Step 2. Get financial counseling and assistance. Avoid scams. There are a variety of not-for-profit organizations and HUD-approved housing counselors that can guide you through this process confidentially and free of charge. The DuPage Home Ownership Center (www.DHOC.org), located in Wheaton, has free foreclosure prevention services. The website for the US Department of Housing and Urban Development (www.HUD.gov) is loaded with valuable information and is an excellent resource.
Step 3. Understand the foreclosure timeline—consult an attorney. This is a hot topic, and the laws are changing. It is my understanding that the state of Illinois requires the homeowner to be at least three months behind before a bank can file a notice of default (NOD). A NOD is legal paperwork served on the homeowner with a request and demand to appear in court. (I strongly recommend you attend). The actual foreclosure and sheriff sale is set approximately seven months after the NOD. These guidelines are not carved in stone and vary depending on your particular circumstances.
Step 4. Understand your options. Here are some examples of options available to homeowners:
- Re-instatement.
- Forbearance or Re-Payment Plans.
- Mortgage Modification.
- Refinance.
- Short-refi.
- Sell the Property.
- Rent the Property.
- Short Sale.
- Deed-in-Lieu of Foreclosure.
- Bankruptcy.
- Service members Civil Relief Act (SCRA).
- Foreclosure.
Knowledge is power. There are a lot of ways and reasons to avoid foreclosure. The goal is to help you make the best decision for yourself and your family, for today and the future.
