Rescuing Your Home

o Don't ignore letters from your lender.

o Call your lender and ask to speak to an officer in charge of your loan. Politely refuse to deal with the collection department or anyone who calls to find out why you haven't made your payments. They don't have the authority to negotiate with you. You dealt with an officer when you obtained the loan and your issue can only be resolved when you speak with a bank officer of the same level.

o Be prepared to document your current monthly income (or loss of income), special circumstances (e.g. catastrophic medical illness/accident) and your expenses. Be honest about your financial crisis.

Once you and your lender negotiate a resolution of your defaulted loan, you should sign a written agreement, commonly known as a "workout," "standstill" or "forbearance agreement." It behooves you to take the initiative to get your agreement in writing, which can be done by letter, such as the sample below. If your lender submits an agreement, consider having an attorney review it to be sure it conforms with your understanding of the workout. Without a signed agreement, you don't have a deal. Simply sending a letter to your lender doesn't count for anything unless it is signed and returned to you. Some lenders will respond by sending their own workout agreement.

During this stage in the meeting, it is important for you to remain calm and cordial. Don't be rude or make threats, no matter how uncooperative your lender is. Be professional and eager to find a solution. Emphasize that you don't want to file bankruptcy, but unless you can work out a amicable solution to the foreclosure, you may be left with no other alternative.

o Get "independent advice" free from any conflict of interests.

o Cooperate with the counselor or lender trying to help you. If they send you a packet of documents necessary to arrange a mortgage modification, fill out the forms right away and return them to the lender.

o Stay in your home to make sure you qualify for assistance.

o Don't fall prey to scam artists, and don't sign any documents you don't fully understand. Get all "promises" in writing. Be wary of any contract of loan assumption where you are not formally released from liability for your mortgage debt.

Home Refinancing

Home refinancing can be just the right move when owners are ready to make major upgrades, or need to access cash. Understanding the benefits and drawbacks of Home Mortgage Refinancing, and Home Equity Loan Refinancing will insure that you make an informed choice at the right time. You'll need to have a good handle on Home Refinancing Rates and know all about Increasing Home Value before you begin any project or sign any contract.