When you fall behind on your mortgage payments on your Massachusetts 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 Massachusetts and maybe even keep your house, even if you’re seriously behind in payments. Lots of properties in Massachusetts have been lost to foreclosure, but there are many ways to avoid it.
Help, I’m Behind in My Mortgage Payments in Massachusetts! 8 Things You Can Do To Help Your Situation
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.
This can be a good card to play, but it may come with some unseen penalties. Basically, reaffirming the loan is an additional commitment to pay. In some states where it’s allowed, an affirmation can create additional liabilities if your property is auctioned.
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. Utilize Government Assistance Programs in Massachusetts
In addition to the Making Home Affordable (MFA) program mentioned earlier, there are other government assistance programs available to help homeowners in Massachusetts who are struggling with their mortgage payments. These programs aim to provide relief to those facing financial hardship and help them avoid foreclosure.
One such program is the Home Affordable Modification Program (HAMP), which aims to modify the terms of your mortgage to make it more affordable. This may involve reducing your interest rate, extending the loan term, or even deferring some of the principal balance. Qualifying for HAMP requires meeting specific criteria, including facing a financial hardship and having a mortgage originated before January 1, 2009.
Another program is the Home Affordable Refinance Program (HARP), which allows homeowners with little or no equity in their homes to refinance their mortgage to a lower interest rate. To qualify for HARP, your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac, and you must be current on your mortgage payments.
When exploring these options, it’s essential to be proactive and reach out to your mortgage servicer to discuss your situation and determine if you qualify for any assistance programs.
6. Consider a Short Sale in Massachusetts
If you’ve exhausted other options and are still unable to catch up on your mortgage payments, a short sale might be a viable solution to avoid foreclosure. In a short sale, you sell your home for less than the outstanding balance on your mortgage. The proceeds from the sale go towards paying off a portion of the mortgage, and your lender agrees to forgive the remaining balance.
Before pursuing a short sale, you’ll need to obtain your lender’s approval. They may be more inclined to approve a short sale if they believe it will result in a smaller financial loss than foreclosing on the property. Working with a knowledgeable real estate agent who has experience in short sales can help you navigate the process and increase your chances of success.
Keep in mind that a short sale can have tax implications and may negatively impact your credit score. However, it can still be a better alternative to foreclosure, which carries more severe consequences.
7. Explore Loan Forbearance Options in Massachusetts
Loan forbearance is another option to consider if you’re struggling with your mortgage payments. In a forbearance agreement, your lender temporarily reduces or suspends your mortgage payments for a specific period, allowing you time to recover from your financial hardship. Once the forbearance period ends, you’ll need to resume your regular mortgage payments and repay the missed payments, either in a lump sum or through a repayment plan.
To qualify for a forbearance, you’ll need to contact your mortgage servicer and demonstrate financial hardship, such as job loss, medical expenses, or a natural disaster. Keep in mind that interest will continue to accrue on your mortgage during the forbearance period, and you’ll still be responsible for other costs, such as property taxes and insurance.
While forbearance can provide temporary relief and help you avoid foreclosure, it’s crucial to have a plan in place to address your financial challenges and resume your mortgage payments once the forbearance period ends.
8. 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 Massachusetts to find solutions to foreclosure problems.
We’ll let you know how we can help.