Behind on Your Mortgage? Waiting Usually Does Not Create More Options

Falling behind on your mortgage can be frightening.

Maybe you lost a job or experienced a reduction in income. Perhaps unexpected expenses hit at the worst possible time. Divorce, the death of a spouse, increased household expenses, or other major life changes can suddenly make a mortgage payment that was once manageable very difficult.

Whatever caused the problem, there is one thing I want homeowners to understand:

Ignoring the situation usually doesn't make it better.

In fact, waiting can reduce the number of options available to you.

If you're struggling with your mortgage, the goal shouldn't be panic. It should be getting accurate information as early as possible so you can make an informed decision.

Start by Understanding Where You Stand

When homeowners become overwhelmed financially, it's tempting to stop opening letters, avoid phone calls from the mortgage servicer, and hope things somehow improve next month.

That's understandable—but it can be costly.

Instead, start gathering information.

How many payments are you behind?

What is the approximate balance on your mortgage?

What is your home realistically worth in today's market?

Do you have equity?

Have you received a Notice of Trustee's Sale?

Has a trustee sale date already been scheduled?

Those answers can dramatically affect what choices may be available.

Contact Your Mortgage Servicer

If your goal is to remain in your home, contacting your mortgage servicer should be one of your first steps.

Depending on your loan, servicer, financial circumstances and eligibility, there may be loss-mitigation alternatives available. Those possibilities can vary considerably, so homeowners should speak directly with their servicer about their particular situation.

Don't assume you're eligible for a particular program—and don't assume you aren't.

Ask.

And if you're communicating with the servicer, keep records of your conversations and copies of the documents you send and receive.

What If Keeping the Home Is No Longer Realistic?

Sometimes the best solution isn't trying to save the house.

That's a difficult conclusion, but it doesn't mean you've failed.

If the payment is no longer affordable or your circumstances have permanently changed, selling the property may need to become part of the conversation.

The first question I would want to answer is:

Do you have equity?

If your home's market value is greater than what you owe and the other costs associated with selling, a traditional sale may potentially allow you to satisfy the mortgage and preserve some of your remaining equity.

That's why knowing your home's realistic market value is so important.

Don't automatically assume you're facing foreclosure simply because you're behind on payments.

Let's find out what the numbers actually look like.

What If You Owe More Than the Home Can Sell For?

That's where a short sale may become a possibility.

In a short sale, the mortgage lender or servicer is asked to approve a sale when the proceeds will not be sufficient to satisfy the mortgage debt and applicable costs in full.

A short sale isn't automatic. Approval is generally required, and every situation can be different.

But if a short sale is potentially appropriate, time becomes particularly important.

Waiting until immediately before a scheduled trustee sale can make an already complicated situation much more difficult.

A Trustee Sale Date Changes the Conversation

Arizona generally uses a nonjudicial trustee-sale process for deeds of trust.

If you've received a Notice of Trustee's Sale, don't treat it like another piece of junk mail.

Pay attention to the dates.

A scheduled sale doesn't necessarily tell you what solution is available, but it does tell you something extremely important:

There is now a timeline.

At that point, you may need information from several different professionals depending on your circumstances, including your mortgage servicer, a qualified real estate professional, an attorney, tax professional, or HUD-approved housing counselor.

As a Realtor, I can help you understand the real-estate side of the situation—particularly the property's value, potential equity, marketability and what a possible sale could look like.

I am not a substitute for legal, tax or financial advice.

Be Careful Who You Trust

Financially distressed homeowners can become targets for people promising easy solutions.

Be cautious of anyone guaranteeing that they can stop a foreclosure, asking you to transfer ownership of your property without clearly understanding why, demanding substantial upfront fees for questionable services, or pressuring you into signing documents you don't understand.

Ask questions.

Read documents.

And when appropriate, obtain independent legal advice.

When you're under financial pressure, protecting yourself becomes even more important.

Don't Be Embarrassed to Ask for Help

Mortgage problems happen to people for all kinds of reasons.

The important question isn't:

“How did I get here?”

The more useful question is:

“What can I do from here?”

Maybe keeping the home is possible.

Maybe selling makes sense.

Maybe you have considerably more equity than you realized.

Maybe a short sale needs to be explored.

Or perhaps another solution is available through your mortgage servicer.

You won't know until you start gathering information.

This Is Exactly What “Market to the Moment” Means

Real estate decisions aren't always created by interest rates or market statistics.

Sometimes life creates the moment.

A job disappears.

Income changes.

A relationship ends.

Medical or family expenses increase.

A homeowner suddenly realizes the mortgage isn't sustainable.

When that happens, the question isn't whether this is the “perfect real estate market.”

The question is:

What options do you have right now?

And the earlier you ask that question, the better.

If you're a Tucson-area homeowner who is behind on your mortgage, has received a Notice of Trustee's Sale, or is worried that you may not be able to continue making your payments, you're welcome to call me.

You don't have to promise me a listing.

Let's begin by looking at the property, its approximate market value, your potential equity and what a real estate solution might look like.

Then you can make your decision with better information.

Wes Stolsek

OMNI Homes International

520-404-9773

www.wesleystolsek.com

Behind on your mortgage? Waiting usually does not create more options.

Let's start by understanding the options you have today—before time eliminates some of them.

This article is for general real estate information and is not legal, tax, lending or financial advice. Homeowners facing mortgage default or foreclosure should consider contacting their mortgage servicer and appropriate qualified professionals regarding their individual circumstances.