Given that I work with a company that works with so many borrowers who are struggling to keep up with their monthly mortgage payments, I tend to get a lot of “what if?” questions from friends and colleagues. Probably one of the most common questions is: What should they do if they lose their jobs or see their income drop dramatically?
I always answer this question the same way: Call and talk to your lender, or more specifically your mortgage loan servicer – the company to which you actually send your mortgage payments each month. Let it know that it is important to you to stay current on your mortgage payments but circumstances have changed and you are now unsure if you can continue to keep up with the monthly payments. The first thing that this conversation does is it gets you on record, in their system, with documentation that you care about being a good borrower. If your particular case gets in front of the loss mitigation department which begins reviewing the notes in your file, the servicer will see that you called in before your loan was delinquent and expressed concern about being able to stay current.
Depending on how this initial conversation goes, the nature of your situation and the type of loan that you have, you may start moving down a path to a potential loan modification. Perhaps you can get a reduced payment for a period of time until you can get back on our feet or maybe a short term interest rate reduction that could bring your payments down to something more palatable. I wish there were a clear formula but there is one thing that you can be sure of – if you don’t speak to anyone about your situation, it will not get better. So don’t wait, pick up the phone and start the dialogue. The conversations and the process may test your patience but acting sooner rather than later gives you maximum flexibility. That is what you probably need the most right now.