If you're having difficulty making your mortgage payments -- and
many homeowners are -- you're probably wondering who you should
call for help. Experts say the worst thing you can do is ignore the
problem. Here are five phone calls to make if you need mortgage
No. 1: Your loan servicer.
The most important call will be to your loan servicer, the company
that collects and manages your payments for your lender.
Calling your servicer is paramount because no one else has the
power to make a decision as to what will happen with respect to
your mortgage, explains Douglas Robinson, a spokesperson at
NeighborWorks America, an affordable housing and community
development organization in Washington, D.C.
"Contacting the servicer could provide a real financial benefit
-- anything from a great
to some cash that would help with having to make a graceful exit
from the property," Robinson says.
Indeed, your servicer can offer you a variety of options, such
as a payment catch-up plan, temporary forbearance, a loan
modification, or approval of a short sale or deed-in-lieu of
foreclosure. Servicers also administer legal settlements that might
entitle you to mortgage help.
Your servicer's telephone number should be printed on your
No. 2: Housing counselor.
If you need help communicating with your loan servicer, you can
reach out to a housing counselor. Robinson says these trained
professionals can help you understand your situation, negotiate a
more favorable loan modification or access other types of
assistance such as legal aid or job-search resources.
Most housing counseling services are free or charge no more than
These services offer an "independent ally" in your discussion
with your loan servicer, says Colleen Hernandez, chief executive of
Homeownership Preservation Foundation, a nonprofit in Minneapolis
that operates a national telephone-based housing counseling
Local agencies based in thousands of U.S. communities also offer
telephone or in-person consultations.
"Some people want to sit across the table from somebody and get
help that way," Hernandez says. "Other people want help right now,
on the phone. There's a lot of shame involved in the foreclosure
process, and the phone allows them a little bit of anonymity."
The U.S. Department of Housing and Urban Development (HUD)
directory of HUD-certified housing counseling
No. 3: Government housing agency.
Many state and local government housing agencies offer
foreclosure-prevention programs. If you qualify -- and the
guidelines are quite strict -- you might be able to get monthly
mortgage assistance, a lump sum to catch up on your payments, a
reduction in your loan balance or money to help you transition into
a more affordable home.
The National Council of State Housing Agencies offers a
directory of U.S. state housing agencies
, and the National Association of Local Housing Finance Agencies
has a search function for
local housing agencies
These services are usually free.
No. 4: Mortgage lender.
Another way to lower your mortgage payment might be to refinance --
and you don't need equity to qualify. Jay Dacey, a mortgage broker
at Metropolitan Financial Mortgage Co. in Minneapolis, recommends
the Home Affordable Refinance Program (HARP) and the Federal
Housing Administration (FHA) streamlined refinance loan, among
other options, for homeowners who need help.
Refinancing isn't free. Typically, you'll have to pay normal
loan origination and closing costs, Dacey says.
If you've previously been unable to refinance, you might want to
repeat your research since interest rates have dropped and the
guidelines for some programs have been eased in recent months.
"If you called before and were told you couldn't be helped, it's
worth calling again," Dacey says.
No. 5: Real estate broker.
If you've exhausted your options or don't want to keep your home,
you might consider a short sale in which your lender will write off
part of your mortgage debt to enable you to sell your home and
avoid foreclosure. A real estate broker can tell you how much your
home is worth and help you find a buyer, Robinson explains.
A broker might also be able to help you rent out your
unaffordable home while you live elsewhere for a while.
"The rental option shouldn't be ignored in some markets,"
Robinson says. "Rents are rising and may be able to keep a loan
from going deeper into delinquency, if the homeowner can find a new
place to live that works within his new reduced budget or
The bottom line is that help is available. If you don't make
that phone call, you'll never know whether you might qualify for