Question: I have had an account with BUYandHOLD for a number of years. A while back, I took out a mortgage to purchase my house. Because I've been laid off, I'm having difficulty making the monthly payments but I hate to dip into my brokerage account.

Bob A.

Answer:

Dear Bob,

First of all, BUYandHOLD congratulates you on raising the question and not burying your head in the sand and ignoring the situation. Lenders who never hear from those facing payment problems often begin legal action which can result in foreclosure.

Bear in mind that lenders really don't want property to go into foreclosure. Thinking about it from their viewpoint will give you courage. A foreclosed piece of property leaves the lender with two negatives: real estate in a very poor real estate market and a financial loss.

Knowing these facts gives you some leverage for negotiating. It means that your lender may be willing to work out a payment plan. Among the options the lender (or you) might raise: a lower mortgage rate (permanent or temporary), extending the length of the mortgage, smaller monthly payments, making up missed payments via a specially devised plan.

So, contact your lender as soon as possible. Keep a log of all conversations, including the names of those you speak with, the date and a summary of the comments made. And keep copies of all correspondence as well.

Prior to making that first phone call, however, it's wise to have a concrete plan in mind. For example, suggest the dollar amount that you can afford to pay every month. And reassure the lender that you are actively looking for a new job, that you will be taking on part-time work, that your spouse is working or plans to work.

Note: If your loan is guaranteed by a federal or state agency, then the lender may be required to provide options to avoid foreclosure. Be sure to ask.

Other Options

If your lender won't budge, your next step is to look at what's known as outside assistance. If you have an FHA-secured loan, contact the Department of Housing & Urban Development at: 800-569-4287.

Also check with the Hope Now Alliance at: 888-995-HOPE. This organization helps homeowners remain in their homes.

The Mortgage Bankers Association
(www.homeloanlearningcenter.com) has consumer information and links to helpful resources. Click on "Foreclosure Prevention Resource Center" on the right.

Good Luck!