Credit Repair Kit For Dummies, 4th Edition
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Falling behind on your mortgage payments can put you in a financial bind and, in the worst-case scenario, can lead to foreclosure. It’s essential to act quickly, even if you’re uncomfortable doing so. Fortunately, you do have options to help you if your mortgage is past due. Here are some ideas to consider:

  • Call your lender or mortgage servicer immediately if you’re going to be late with a payment. The worst thing you can do is nothing. After you’re late, your grace period disappears, so a foreclosure action may be two weeks closer than you think.

  • Contact a HUD-certified counseling agency for more options. Contact the Department of Housing and Urban Development or Project HOPE (888-995-4673). A HUD-certified counselor can advise you for free, help you work with your mortgage servicer, and refer you to local resources that you may not know about.

  • Don’t allow your mortgage to become 90 days past due. Partial payments may not be accepted after 90 days.

  • Think twice about strategic default. If you owe a great deal more on your mortgage than your home is worth and you’re considering walking away from your home, research the many negatives before mailing in your keys.

  • Find out your alternatives to foreclosure. Find options at Federal Trade Commission or HUD.

The Mortgage Forgiveness Debt Relief Act has conditions that expired on January 1, 2014, and not everyone is eligible. However, the act may be extended. If it is and you qualify, you and your spouse can avoid taxes on up to $1 million of forgiven mortgage debt. No one wants to pay taxes if they don’t have to! The Internal Revenue Service offers more information on this important act for homeowners.

About This Article

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About the book author:

Steve Bucci, BA, MA, is a personal finance expert and a nationally syndicated columnist whose column is carried by the financial megasite and the Scripps Howard News Service.

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