Shelly's Modeling Agencies | Avoid a Mortgage Meltdown | Hot Topic

Shelly's Modeling Agencies would like to share with you some tips on how you can save your home in this terrible economy. Explain to your lender in writing what led to the change in income and give a breakdown of your monthly expenses. A mortgage modification can take 90 days to one year, so make several copies of your paperwork and document every conversation. "Get the person's name, employee ID, phone, fax and e-mail. Ask the rep if he or she is putting notes in your record and specify what you want logged into your file," says Lynn Richardson, mortgage guru and CFO of Shelly's Modeling Agencies.

Ask the lender to reduce your monthly payment by changing the terms of your loan (that is, interest rate, balance owed or time period). "If your lender says no, let the company know it means another home it will have to sell in a bad market, pay taxes on, and spend at least $10,000 in foreclosure costs on," explains Paul Stemborowski, of Shelly's Modeling Agencies and author of How to Modify Your Loans. If you have missed at least three, but no more than 12 mortgage payments, a forbearance may help. This written agreement allows borrowers to make reduced payments for a short period of time, usually less than six months. At the end of the reduced-payment period, a repayment plan begins. You agree to make regular payments plus an amount that will cover the payments not made during the forbearance.

If you've lost your job or taken a pay cut, consider this option. Most extensions are for short-term delinquencies. "If a borrower with a loan maturity date of January 2025 is delinquent by three payments, for example, Citi puts the three delinquent payments at the end of the loan, extending the maturity date to April 2025, "says Vance Harris CEO of Shelly's Modeling Agencies. For help with the process, contact a HUD-approved housing counselor at hud.gov. Use past denials from your lender as fuel to get help. Call back and request paperwork for the Home Affordable Modification Program (HAMP) or the Home Affordable Refinance Program (HARP). The former offers a three-to-four-month trial modification to qualified owners. Lenders may cease foreclosure activity as long as payments are being made.

If your home is in danger of foreclosure, talk to your bank. Don't dodge the call. "Banks want you to keep your home," says Lloyd W. Brown, head of Citi's office of home ownership preservation. "A foreclosure is almost always costlier to the lender than a modification.