Stop Your Foreclosure: How to Lower Your Mortgage Payments Without Refinancing

Over 2.5 million people in the United States are facing higher mortgage payments. Millions more are in foreclosure already or expecting to be in foreclosure.If this is you, then the choice becomes staying in your home a few more months and losing it to the foreclosure process, or else working things out with your existing mortgage company so you do not lose your home.There are many advantages to staying and avoiding a foreclosure:1. You don't have to move.2. Your kids don't have to change schools.3. You avoid embarrassment and unhappiness.4. You keep the tax advantages of being a homeowner and deducting your mortgage interest.5. You avoid having a foreclosure on your credit report. Foreclosures can lower your FICO credit score by 50 - 150 points. They remain on your record for seven years and will prevent you from qualifying for a decent home loan for at least two years.What stops most people from avoiding foreclosure is they do not know how they can talk to their mortgage lender and get the mortgage company to work things out so they can stay in their home and avoid the foreclosure.How to work with your mortgage company to stop foreclosureYour mortgage company is not happy about taking your house back. They prefer to work with homeowners if they can, so they do not get houses back.A foreclosure that results in their getting a house back can cost them $30,000 to $70,000 because they have to evict the tenants (either the homeowners, or sometimes people who are squatting in the house or even tenants that the former homeowner put into the house.) The lender has to clean up the house, fix it up, market it and sell it. This can take up to one year.Lenders are used to taking houses back. They are set up for it. But they don't like to do it.They want to work with you instead. They have been known to do the following:1. Take all your arrears and add it to the loan balance. Adjust your payments slightly, or lengthen the loan period.2. Let you pay the arrears off over six months or as long as two years.3. Lower your interest rate.4. Adjust what they report to credit bureaus. They can remove derogatory credit information or report it differently so it doesn't hurt your credit as much.There are many things your lender may be able to do. You need the know-how to be able to communicate in language your lender understands. This workout process involves:1. You contact your lender.2. You carefully prepare and submit paperwork that makes your case. You need to know how to create this paperwork so that it is truthful and makes your case. There is an art and a science to this that can make the difference between success and failure.3. You negotiate with your lender.4. Your lender agrees to a workout and sends you paperwork that you approve and send back.You could be in a much better financial position in a few months if you know how to pursue a workout with your existing lender. Finding new loans is difficult or impossible. Working things out with your existing lender can be a win-win situation that lets you stay in your home and sometimes even lower your monthly payments.