If you are behind on your mortgage payments, and you have received a letter from your mortgage holder stating that they are about to foreclose on you, then you need the information contained on this site.

Our mission is to inform you, the homeowner, of your alternatives if you are behind in your mortgage payments and facing foreclosure. We will aid those who seek our help if we can.

Why should we care? Because we know what it is like. We have been there. In 1982 I lost my well paid job at the railroad. The economy at the time was poor. Inflation and unemployment were very high. I was unable to get a job that would replace the one that I had just lost. Consequently we got behind in our mortgage payments (we had to eat).

No one was there to help us out. No one was there with the answers that we so desperately needed. No one explained our options to us.

As a result we were forced to let our house go to foreclosure and we had to move out of our home. It was devastating and horribly embarrassing. Our credit was destroyed. Those were some of the most horrible years of our lives. It took us until 1992 - 10 LONG YEARS - to get back on our feet. No one wanted to talk to us because of the foreclosure.

We want to help you so that this does not happen to you.

So just what are your options if you find yourself in this situation? What can you do? Who can you turn to? What help is available? Read on.

We have compiled a list of the 7 most common solutions. They are:

Let the bank go ahead and foreclose

    With this option you just simply do nothing. You let the bank or mortgage lender proceed with the foreclosure. As soon as the foreclosure is granted the bank then puts your house up for auction to the highest bidder. You still have the ability to make up your back payments plus other charges incurred by the bank and make good on your mortgage (for a limited amount of time) and get the house back but the foreclosure will stay on your record for between 7-10 years. The result is that you could still own the house, but you would suffer from a bad credit rating for 7-10 years because the foreclosure would stay on your record.

 

    You simple take the keys to your mortgage company or bank, sign the deed over to them and just walk away from the house. While this could be an option for you again it kills your credit for 7-10 years.

 

    If you decide to list your house with a realtor you will need to sell it for enough to pay off your mortgage, including all back payments you have missed, plus pay the realtor their commission (which is usually 6% of the sale price). If you have little or no equity this is not a very viable option. Plus, you will need to find a buyer quickly or the lender will foreclose any way.

 

    What most people don't know is that a bankruptcy only stalls the foreclosure. Once the bankruptcy is completed the bank can then petition the court to have the house released from the bankruptcy and continue with the foreclosure. Now what you have on your credit report is a bankruptcy AND a foreclosure. In our opinion this is NOT a very viable solution!

 

    You talk to your mortgage lender and make arrangements to CATCH-UP your back payments. In most cases they will only allow you a few months to do this. That means that you may now have to make up to double, if not more, mortgage payments for several months. Chances are if you have not been able to make your mortgage payments for a few or even several months you will not be able to afford to do this. Banks are not very lenient when it comes to forbearance payments either. If for some reason you can't make ALL of a payment one month they could go ahead and proceed with the foreclosure anyway.

 

    You could rent out or sell your house to someone else on a Lease Option agreement. You then ask for some money (a down payment or option consideration) up front to help you catch up on your mortgage, and then collect enough money in rent or lease payments each month to make your mortgage payment. The draw-back here is that you MUST use the money to pay for your mortgage payments otherwise you will be no better off than you are right now. You CANNOT spend the money you get from rent or lease option payments or you will be back where you started. Plus, this depends upon you finding a buyer/tenant in time AND the new owner/tenant making timely payments to you while taking care of the property.

 

    Most people have never heard of this option. The banks and mortgage companies certainly are not going to tell you about it. If you choose this option you work with a professional who negotiates a deal with the bank to take less than what is owed on the mortgage as full payment. The bank then writes off the rest. The professional that you are working with will then purchase the house from the bank at that negotiated price and you are freed from the foreclosure.

    Any damage that has been done prior to the agreement will still be there, but you are saved from having a foreclosure on your credit record for that 7-10 years.

    Chances are the damages that have been done without the foreclosure will be fixable within a couple of years.