When an unexpected illness, injury, or loss of a job eliminates a portion of household income, many families in America have found themselves unable to meet monthly mortgage payments. Believe it or not, foreclosure sucks for everyone involved, not just the homeowner. The process is expensive for the bank to undergo as well. These things become compounded especially if the proceedings lead to court. Therefore, the basic thing that a borrower who is behind needs to accomplish is to show the lender that working with him or her will be cheaper than foreclosing. There are a number of things to do in this situation, and with any luck, you or a friend in need can avoid a financially disastrous predicament.

The first thing that you should do is respond to phone calls and letters. Many people refuse to answer calls from their lender due to fear, as we said, often your mortgage servicer will want to work with you. But wait. Be careful. Do not accept any terms and/or conditions until you speak with a knowledgeable attorney. In cases where someone is so behind that foreclosure is a possibility, it is of paramount importance to have someone who can act as an intermediary between the lender and the homeowner. If you cannot consult a lawyer, there are a number of free services that are available for people that need help making their mortgage payments.

Is your issue short-term or long-term? There are different routes depending on which type of situation your find yourself in. A forbearance is relatively easy to get if something like an emergency medical bill imparts a strain on your finances for a finite amount of time. If you cannot predict how long a financial hardship will be incurred on you, it is of paramount importance to contact your provider, but remember to have your attorney or other adviser available when you do this.

We will continue this discussion in Part 2 of this post.