If you are having trouble making your mortgage payments on time, resolving the problem fast is critical, according to LSU AgCenter family economist Dr. Jeanette Tucker.
Reasons for late payments include an annual adjustable rate mortgage reset, salary reduction or unemployment among other possibilities.
“After your mortgage is 90 days past due, you may have to pay the entire past-due amount plus any late fees in one lump sum to satisfy your lender,” Tucker warns, adding, “If you don’t pay, lenders proceed to foreclosure, according to their procedures manual.”
The estimated time frame in Louisiana for a judicial foreclosure is 220 days from foreclosure initiation to the sale of your home. “From a credit score and credit reporting standpoint, mortgage defaults are among the most serious negatives out there,” Tucker says.
“Communicate with your lender,” she advises. “Contrary to what many people think, your lender does not want to foreclose on your home.”
Tucker says your lender would much rather work with you to keep you in your home and to continue earning money servicing your mortgage loan. When you call your lender, ask to speak to the loss mitigation department. Be prepared with an explanation of why you will not be able to make your payment and what help you need to assure you are not late again.
The LSU AgCenter family economist also advises seeking help from a U.S. Department of Housing and Urban Development-certified, nonprofit housing counselor at Project Hope at 1-888-995-HOPE or by visiting the HUD Web site at www.hud.gov.
“These counselors are trained professionals with the ability to review your financial situation, make recommendations and lead you to programs and assistance that will work best for you,” Tucker says, noting, “Expect to pay little or nothing for this help.”
She says to beware of counselors who are not HUD-certified and nonprofit. “Proceed with caution as you evaluate any prospective source of help,” Tucker warns.
Editor: Mark Claesgens
The LSU AgCenter and the LSU College of Agriculture