When you fall behind in your mortgage payments on your Atlanta home, it can feel like you’re drowning in debt. We help homeowners all of the time who call us saying, “I’m behind in my mortgage payments.”
Even if you’re able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge.
There’s a few options that can help you to avoid foreclosure in Atlanta and maybe even keep your house, even if you’re seriously behind in payments. Lots of properties in Atlanta have been lost to foreclosure, but there are many ways to avoid it. Most people facing potential foreclosure are seeking ways to avoid foreclosure, so we wrote this article to provide some tips on what to do when you’re behind on your mortgage in Georgia.
1. Bankruptcy to stop foreclosure
Filing for bankruptcy to avoid foreclosure in Georgia is 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.
Although Chapter 7 bankruptcy can temporarily stop foreclosure proceedings, it’s ability to ultimately save your home from foreclosure is limited. If you’ve found yourself in financial difficulty and behind on mortgage payments, you may be considering bankruptcy vs foreclosure, which allows you to settle with your creditors in court. In a bankruptcy, you may be able reorganize your debts to make your payments more manageable—or even eliminate your debts completely.
While a bankruptcy can help you get rid of your debt in general, you may want to recommit to the terms of your mortgage if you can afford to pay it and you want to keep the home. The promise to repay a mortgage after bankruptcy is known as reaffirming your mortgage debt, and whether you want to take this step depends on your circumstances and the type of bankruptcy for which you have filed.
2. Reaffirming your mortgage:
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.
Breyer Home Buyers was able to buy my house fast when I had major medical issues and was behind in my mortgage payments. I didn’t have to foreclose on my house, I was able to pay off my medical bills, and I had extra money at the end.
A reaffirmation agreement is a legal contract that states your promise to repay all or a portion of a debt from which you might have otherwise been released in a bankruptcy case. Reaffirming your mortgage debt means recommitting to the terms of the loan and promising to pay it. However, if you default or fail to pay the mortgage, you could still be subject to foreclosure.
Bankruptcy has given you the right to discharge a debt and no longer have to repay it. If you are reaffirming that debt, you are agreeing to repay it.
People usually opt for bankruptcy because they cannot afford to meet their financial obligations. If that’s the case for you, reaffirming a mortgage debt might undo the positive aspects of the bankruptcy.
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.
Forbearance puts your mortgage on hold temporarily. The payments are suspended or reduced for a time, and you agree to repay with a lump sum or in installments once the pause period ends. A mortgage forbearance agreement is made when a borrower has a difficult time meeting his or her payments.
With the agreement, the lender agrees to reduce or even suspend mortgage payments for a certain period of time and agrees not to initiate a foreclosure during the forbearance period. The borrower must resume the full payment at the end of the period, plus pay an additional amount to get current on the missed payments, including principal, interest, taxes, and insurance. The terms of the agreement will vary among lenders and situations.
A mortgage forbearance agreement is not a long-term solution for delinquent borrowers. Forbearance is designed for borrowers who have temporary financial problems caused by unforeseen problems such as temporary job loss or medical problems. Borrowers with more fundamental financial problems, such as having chosen an adjustable rate mortgage on which the interest rate has reset to a level that makes the monthly payments unaffordable, must usually seek remedies other than a forbearance agreement.
A forbearance agreement may allow a borrower to avoid foreclosure in Atlanta Georgia until his or her financial situation gets better. In some cases, the lender may be able to extend the forbearance period if your hardship is not resolved by the end of the forbearance period to accommodate the situation.
During forbearance, the record reflects that you’re current on your mortgage.
5. Loan Modification or Refinance:
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. Loan servicers will want to know your financial problem is behind you. They want to make sure the borrower can afford that payment. Loan modification in Georgia is great if you hit a rough patch financially, such as temporary job loss or medical problems as mentioned earlier. Typically, you have to meet some criteria, such as providing a financial or personal hardship.
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. A loan modification is almost like a refinance. You start a new loan with a longer payoff term or a lower 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. Some mortgage servicers will green-light a straight-up refinance loan for troubled homeowners. A refi does require underwriting and some work on the servicer’s part. But the servicer already has all your documentation and can do it fairly quickly and cheaply.
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.
6. Borrow money from a private investor:
If you’re behind in your payments and need to sell your house fast in Georgia, we can help.
In certain circumstances, we may even be able to help you stay in your home.
We work with homeowners in Atlanta to find solutions to foreclosure problems.
We’ll let you know how we can help.