When you fall behind on your mortgage payments on your Memphis home, it can feel like you’re drowning in debt.
Even if you’re able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge.
There are a few options that can help you to avoid foreclosure in Memphis and maybe even keep your house, even if you’re seriously behind in payments. Lots of properties in Memphis have been lost to foreclosure, but there are many ways to avoid it.
Help, I’m Behind in My Mortgage Payments in Memphis! 5 Things You Can Do To Help Your Situation
1. Bankruptcy:
This is usually the tool of last resort. If you’re being crushed by lots of debt, bankruptcy can be a good way to negotiate with lots of lenders at once. It’s a lot of work, and it won’t help you avoid your mortgage. Different lenders will treat your circumstances in unique ways. You’d benefit from serious professional help – the best you can afford.
2. Reaffirm:
While reaffirming a loan can be a viable option for some homeowners, it’s essential to understand that it comes with potential risks and liabilities. Essentially, reaffirming a loan is an agreement to continue paying off a mortgage debt, even after bankruptcy proceedings have concluded. While this may help you keep your home and avoid foreclosure, it also means you are taking on an additional commitment to pay, which can be financially challenging in the long run.
Additionally, in some states where reaffirmation is allowed, there may be additional liabilities if your property is eventually auctioned. For example, if you reaffirm a loan and continue to make payments, but are later unable to keep up with the payments and your property is sold at auction, you may still be held responsible for any remaining mortgage debt after the sale. This can result in significant financial hardships and legal consequences.
Therefore, while reaffirmation may be an option for some homeowners, it’s important to weigh the potential risks and liabilities carefully before making any decisions. It’s always best to consult with a qualified attorney or other legal professional who can help you understand the implications of reaffirming your loan and explore all available options to help you keep your home or manage your debt. Alternatively, working with Memphis Home Buyers to find a new home or explore other financing options can help you avoid the risks and uncertainties of reaffirmation and ensure a sound and stable financial future.
3. Making Home Affordable (MFA):
If your mortgage qualifies, you might be able to participate in MHA. Any loans backed by Fannie Mae or Freddie Mac must be considered for MHA, and other lenders choose to participate in MFA.
With MFA, your payments and/or interest rates might be lowered – even the principal balance (if your home is worth less than you owe). If you’re unemployed, you might be able to get your payments temporarily suspended or reduced.
MFA is a government program, so be prepared to deal with lots of paperwork. It ain’t free money – you gotta work for it.
4. Negotiate with your bank:
Lots of lenders routinely offer some level of assistance. You have to work hard at it, but you might be able to get your interest rate reduced or a temporary reduction in your payment.
Most of the time, lenders will want to steer you to refinance your loan – but by the time you’re a few payments behind, you probably don’t qualify for a reduction in interest rate.
You have to work really hard to negotiate with a bank. Usually, it takes lots of calls and the patience of a saint to get through the bureaucracy. Never, ever act rude. Ask for help from everyone you speak with, but don’t sound desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
If you’re in need of a temporary fix and want to stay in your home, most banks can be forgiving. Sometimes they’ll be willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to give them a lot more money in the long run. If they have to sell your house at a foreclosure auction, they’ll take a huge loss.
That sounds obvious, but for some reason, bankers seem to forget it when saying no to someone in need of help.
5. Borrow money from a private investor:
If you’re behind on your payments and need to sell fast, we can help.
In certain circumstances, we may even be able to help you stay in your home.
We work with homeowners in Memphis to find solutions to foreclosure problems.
We’ll let you know how we can help.