Working Out A Repayment Plan With Your Lender
If you are behind on your mortgage payments and you are able to work out a repayment plan agreement, why not work it out. A high number of homeowners tend to want to give up and run away when their mortgage payments fall behind, or if it becomes overwhelming. Stop! That is the worst thing to do. Always, always, try to work something out with your lender. You have to actively communicate with them and work out an agreement if you are able to and your home is worth saving. Your lender or servicer will be more than happy to work out a repayment plan agreement with you, which will help to bring your mortgage back to a current status. Your mortgage company will not just take your account out of foreclosure or put a foreclosure sale on hold just because you want them to do so.
Generally, when you are working out a repayment plan on a past due account, you will need to put a down payment on your delinquent balance in order to start a repayment schedule to bring your account current. Once your have worked out an agreement, your lender will put for foreclosure sale on hold and bring you out of foreclosure, or they will close your foreclosure file, and bring your account out of foreclosure. Remember, you have to make the call and be able to pay a reasonable down payment on your past due account and complete a workout. A typical senerio might work out something like this:
Your are outstanding for 5 payments at $1500 each=$7500
Lender advance fees/Attorney Fees & costs
=$1200
Your own late fees + =$300
Total outstanding fees =$9000
An acceptable down payment might be:
You put a down payment of $2700
Leaving a balance of $6300
Lets say you have disposable income of $525/month after all your expenses
Your new repayment plan mortgage payment will be your base on your regular payment of $1500/mth+Your disposable income of $525/mth, for a total monthly payment of $2025 for 12 months before you have caught up with all of your missed payments. Once you are caught up with your payments; your mortgage payment will go back down to your regular payment of $1500 in 13 months from when you start of your repayment plan agreement. Unless you are able to bring your account current quicker by paying more on your monthly payments, or just outright paying it off earlier than the agreement.
Most lenders will take a 1/4 to 1/3 of your outstanding balance as a down payment to towards what you owe. Your mortgage company wants to make sure that you will cover any outstanding attorney fees and cost first, by you doing that you are paying for any or all work that the foreclosure attorney has completed on your account which your mortgage company has to pay to the attorney for. And depending on how many payments you are behind, they might be able to make one or several payments on top of your attorney fees & costs to get started with a repayment plan agreement. Remember, they have nothing to loose if your are covering your attorney fees and costs, and you are paying down on 1 or more months of your past due payments. Especially if you show the ability to get caught up on your delinquent balance.
Your lender does not want to foreclose on your property especially when you have no substantial equity in the property. However, "it is a necessary evil." They complete the foreclosure sale when they have not heard from you or have not been able to come to any workable agreement with you. A lot of homeowners hide from their lender once they start to fall behind on their mortgage payments; which is not the smartest thing to do if you want to keep the property, at least talk to them.
Selling a foreclosure property these days will often mean that your lender will have to take a loss to their bottom line. Your mortgage company would rather to suffer a loss from the sale of your property than to have a non-performing asset that is continuously draining them. There has to a be a balance in there somewhere for your lender. No homeowner can expect to stay a year or more past due and avoid their lender, and somehow expect nothing to happen. Unless your have a valid bankruptcy, or some other extenuating circumstance then expect your lender to do something when you are too far behind on your mortgage payments.
