We are 3 months behind on our house payments because my husband recently lost his job. We got a letter in the mail yesterday and have 30 days to come up with the money. If we can’t our home will be foreclosed. If we can’t come up with the money what should we do? I have tried to get a modification loan and the guy to me we didn’t qualify. What are other steps we should take? We live in Kansas if that helps.
If you want to continue living in your house, you need to call your lender again and tell them you need to be considered for a loan modification. If one person says you can’t, then call back and talk to someone else - be persistent! Depending on who your lender is, the number you call is transferred to different parts of the country and the "clerks" that answer the phones may have a different answer. Also, they aren’t always updated or even educated on their loan modification programs, so be persistent.
Being unemployed doesn’t necessarily disqualify you from being approved for a loan mod but having a job definitely helps. You have a legitimate hardship and the lender is supposed to assist you. Did your husband receive a severance package? Or is he receiving unemployment benefits? You’ll need to prove to the lender that he’s trying to get a job for them to consider the loan mod. They want to make sure that, if they modify your loan, you’ll be able to afford the new, lower payment. Don’t settle for a forbearance plan, whereas they’ll let you make catch up payments. Your monthly payment will be higher. That defeats the purpose of what you are trying to do and may even put you into a worse financial situation.
Once the lender has all of the required documentation and information from you (i.e. pay stubs, bank statements, income and expenses, etc.), your file will go into review and the foreclosure process will be postponed, but not stopped, pending their decision of your loan mod. Be sure to follow up weekly with them once you submit everything. Keep on top of things, because if something slips through the cracks, the foreclosure process will continue, sometimes without you even knowing.
If you don’t want to live there anymore, then you need to put your house on the market or short sale it if you owe more than what your house is worth. Enlist the services of a Realtor and they’ll be able to help you with the short sale. Don’t just walk away from the house as this will have a more adverse affect on your credit as opposed to a short sale. A foreclosure will drop your FICO scores about 200 to 300 points whereas a short sale will drop it by 50 to 150 points.
