Missing mortgage payments is not the end of the world

By Robert J. Bruss

DEAR BOB: I am four months late on my mortgage payments because of a job loss. Now I am in the process of foreclosure. What are my options? I am back working again but do not have all the money yet to catch up on my monthly payments. Any advice? --Jawanna P.

DEAR JAWANNA: Please don't bury your head in the sand, as many borrowers who are in mortgage default do. Instead, contact your mortgage lender immediately by phone.

Explain your situation very politely. Ask for a forbearance and a loan workout plan. That is presuming you can now afford to pay at least the regular monthly mortgage payment.

Ask that your unpaid mortgage payments, probably totaling several thousand dollars, be added to your mortgage principal. The result will extend your mortgage by several months but then your mortgage can be reinstated in good standing with the lender.

Lenders do not want to foreclose. They lose money on virtually every foreclosure. But lenders will insist their borrowers make the monthly payments on time.

If you are unable to resume the regular monthly payments, then ask the mortgage lender for time to sell your home to pay off the mortgage balance.

But do everything you can to avoid a foreclosure sale. Worse yet, filing bankruptcy will merely delay losing your home by foreclosure if you are unable to pay the monthly payments.