If you are having trouble paying your mortgage, you may be able to negotiate a loan modification, but it isn’t easy. You will have to deal with a loan servicer, and you may be on the phone a long time to get through, so try to allow enough free time to accomplish the task. Even when you make contact, it may take weeks before the mortgage holder will respond with a decision. You can get further information about whether you may qualify for a modification from the Treasury Dept. homeowners’ website: www.makinghomeaffordable.gov.
When you make contact with a loan servicer, try to get the name and re-contact information for the person. Ask for the name and contact information of the holder of your mortgage loan. Ask for a written copy of your payment history. Ask also for hard copies of any commitment made to you, especially of a loan modification or a cancellation of a foreclosure sale of your home. Keep records of all phone conversations you have with the servicer. If you think your rights are being violated, consider contacting a non-profit housing counselor or seek legal help. Housing counselors will help you for free; beware of services that offer to negotiate on our behalf for an upfront fee.
If you have no success in trying for a loan modification, consider the alternative of doing a “short sale.” This means you sell your house for less than you owe on it, but the bank takes the proceeds and excuses you from the rest of the debt. You still lose your house, but the adverse effect on your credit is much less than a foreclosure or bankruptcy. Contact a reliable real estate agent for details.