Tennessee homeowners who have fallen to difficult times may be struggling to make regular mortgage payments. If the circumstances are anticipated to be temporary in nature, there may be ways to remedy the situation. Homeowners may benefit from consulting with an experienced foreclosure attorney to assist them in negotiating with their loan servicer.
- One solution may be a reinstatement plan where the homeowner offers to settle the amount that is past-due, along with any penalties and late fees by a specified date as agreed to by the mortgage holder and the homeowner.
- Homeowners who have only failed payment on a few occasions may discuss a repayment plan with the lender. Such a plan involves adding the unpaid amounts in portions to the regular amount for a predetermined number of months.
- In cases where a homeowner knows that his or her circumstances will make it impossible to pay the mortgage for a specific time, such as a medical condition that will prevent the homeowner from working for a known number of months, the lender may agree to forbearance. With this plan, the mortgage holder agrees to reduce or suspend the payments for an agreed period, followed by the resumption of payments, including additional partial or full payment to cover the unpaid amounts.
- Homeowners may also apply for the modification of a loan that will permanently modify a mortgage contract in order to make it more affordable. The modifications could include a lower interest rate, a longer term, or adding past-due amounts to the balance of the loan. The loan provider may even agree to forgive a percentage of the loan amount. Mortgage modification may help those homeowners who are facing long-term difficulties.
- Depending on the state of the property market, a homeowner may also consider selling a home to settle the past-due mortgage payments.
An attorney may also inform the homeowner of the option to avoid foreclosure by filing for personal bankruptcy. A Tennessee homeowner who has a recurring income may be allowed to keep a mortgaged home in a Chapter 13 bankruptcy. The court has to approve a plan for repayment of the mortgage by using future income over a period of three to five years. Once all payments have been made according to the repayment plan, some remaining debts may be discharged.
Source: consumer.ftc.gov, "When Paying the Mortgage is a Struggle", Dec. 27, 2014