I am Behind in Payments and Need Mortgage Help

The U.S. housing market is in a sad state of affairs right now. Millions of homeowners in the U.S. fell behind on their mortgage payments in 2008, and many more will join those ranks in 2009 and beyond. So it's no mystery why so many people are seeking mortgage help right now.

But where do you go? What can you do? How can you get help when you've fallen behind on your mortgage payments, and what options do you have? That's what I'll address in this article.

Generally speaking, people who need help with their mortgage payments fall into one of two categories. If you're seeking help in this area, you can probably identify with one of the following scenarios:

• Scenario 'A' - The homeowner has experienced a temporary financial setback, such as unexpected medical expenses or job loss. As a result, the homeowner falls behind on the monthly mortgage payments and needs help getting caught up. This is a short-term
• Scenario 'B' - The homeowner simply cannot afford the home anymore. This may be because of an ARM loan adjusts to a higher rate, a recent job loss, the accumulation of other debts, or a combination of these things. This is a long-term predicament.

The question is, which of these categories do you fall into? If you are behind on your mortgage payments and looking for help, you must first determine whether you're in a short-term or long-term predicament. You can't find the best path forward until you start with this important distinction. So let's talk about the options people have when they fall into one of these scenarios.

If you are having short-term financial problems, and you feel you can get back on track with your payments, you should start talking to your mortgage lender (or whoever is servicing your loan at present). Most lenders will offer some kind of repayment plan to help you get caught up when you've fallen behind on payments. Specifically, you should ask them about reinstatement, repayment plans and forbearance. These are ways to get caught up on payments in lump sum or through future installments.

If you are having long-term financial problems, and you simply cannot afford the home anymore, then you will probably have to sell. Once again, you should talk to your lender about your options. In particular, you should ask if they would be willing to allow a short sale (where the home is sold for less than what you currently owe on it).

A home loan modification might be another option if you are behind in payments and need mortgage help. This topic has been in the news a lot lately, mainly because it's part of President Obama's economic recovery plan. The government is actually providing incentives to lenders and loan servicers who modify mortgages (to make them more affordable for struggling homeowners).

Conclusion and Going Forward

So, if you have fallen behind on your mortgage payments and need help of some kind, you should take the following steps. First, determine whether your payment problems are short- or long-term in nature. Next, talk to your lender and let them know where you stand. Research the options that are available to you, depending on your scenario. Learn everything you can about the most relevant solutions, and start talking to your lender early on. The worst thing you can do is nothing -- so get started today!