As of the first quarter of 2019, Americans were carrying more than $15 trillion in mortgage debt. What’s worse, more than 9% of those —about 5.2 million mortgage loans—were seriously underwater. That means the amount remaining due on the mortgage loan is significantly more than the home is worth.
For many people, mortgage loan issues are more emotionally charged than any other type of debt. Since mortgage loans are secured by the property, falling behind on the loan can mean facing foreclosure. The idea of losing your home is naturally a serious stressor. But, the emotional response to the possibility of foreclosure prompts a lot of very bad, very costly decisions.
If you’re struggling with mortgage debt, it’s important to get clear about your priorities and realistic about your options.
The Stress of Facing Foreclosure
The foreclosure process works differently from state to state. In some states, the lender must file a lawsuit to foreclose on a home and sell the property. In other states, known as “non-judicial” states, the foreclosure process is more informal and moves more quickly.
Typically, you’ll receive a demand letter for full payment of your mortgage after you’ve missed three payments. At that point, you can try to make payment arrangements with the mortgage servicer (regardless of what the letter says), and negotiating with the servicer in writing may delay the foreclosure process. Without this type of delay, foreclosure proceedings may begin as soon as 30 days after the demand letter.
What many people don’t know is that it’s often possible to stay in your home for months, or even years, without making a mortgage payment. And, the longer you’re able to hold on to the property without making a payment, the more options you may have.
Managing Mortgage Loan Debt
The first step toward effectively managing mortgage debt is to objectively assess whether or not it’s in your best interest to keep your home. Stop thinking in terms of losing your home and think about what the best outcome for you and your family might be.
If you’re seriously underwater, leaving your home may be the best and most cost-effective option. But, that doesn’t mean you must or should give in and move out at the first sign of trouble.
Everything from how you handle negotiations to how you care for your home can impact your options, including how much it will cost to settle your mortgage debt and keep your home. Most people who face foreclosure lose their homes quickly, because they don’t know how to take control of the process. DebtCleanse members have the information and help they need to turn the tables on mortgage servicers and take charge of negotiations.
DebtCleanse Can HelpWe’ll give you the strategies and resources you need to put debt collector stress behind you.
When you sign up with DebtCleanse, we’ll team you up with an attorney in your state. Your attorney will tell creditors to direct any future communication to their law offices. This should immediately stop harassing calls and letters.
Your attorney will also interview you and comb through your documents for any violations of the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), Telephone Consumer Protection Act (TCPA), Real Estate Settlement Procedures Act (RESPA) or other federal and state laws. Those violations create leverage to challenge your automobile loan and any other types of debt. If creditors and debt collectors don’t get in line, your attorney will hold them accountable.
Often, debt collectors stop collection action as soon as they receive a letter from an attorney, focusing their efforts on people who are less likely to fight back. And, many consumer protection statutes require debt collectors who break the law to pay your attorney’s fees. So, our members can often resolve debts without paying anything beyond the membership fee.DebtCleanse can put you back in control with creditors and debt collectors.