Five Reasons You Should Negotiate With Your Mortgage Lender

When people fall behind on their mortgages and are potentially facing foreclosure, the last thing they want to do is enter into negotiations with their mortgage lender. However, in many cases, it is not only a reasonable option, but probably affords the homeowner the best opportunity to find a solution to their dilemma of being caught between a temporary financial hardship and the prospects of losing their home. Below are five reasons you should consider negotiating your mortgage with your mortgage lender:

1. You may be able to renegotiate the terms of your mortgage – Mortgage Modification
   1. One of the most important reasons to come to the negotiating table with your mortgage lender is that you may be able to renegotiate your mortgage. What is surprising to many people is that lenders often prefer renegotiating over foreclosure. The bank ultimately wants is your money, not your home. Note, this gives you potential leverage to get a more favorable deal than you got the first time around.
2. You may be able to get a more favorable repayment plan – Mortgage Modification
   1. A common agreement seen in these negotiations is being able to change the repayment schedule for your mortgage. For example, you may be able to repay your mortgage in smaller amounts over a longer period of time than you originally agreed. This adjustment to the term of the loan can reduce the financial burden enough to make the payment and associated carry costs of homeownership manageable.
3. You may be able to Refinance your mortgage
   1. Another common solution to financial issues surrounding a mortgage is to refinance the mortgage. This means that you would obtain a new mortgage to pay off the old mortgage — preferably under more favorable terms than the original mortgage. For example, a refinanced mortgage may have a better interest rate, or other terms that make repaying the mortgage more feasible.
4. You may be able to arrange a Short Sale
   1. Even if all else fails, you may still be able to find some relief by arranging a short sale for your property. A short sale is an agreement to sell off the property for less than the sum it is worth prior to foreclosure. While this may not be an ideal solution, it can help you to satisfy the mortgage while giving you a chance to find an alternative living situation before being forced out of your home.
5. You can avoid the worst possible consequences of a foreclosure
   1. Having your home foreclosed on is perhaps the worst possible thing that can happen to a homeowner, both emotionally and financially. Not only will you find yourself without someplace to live, but you will also potentially suffer damage to your credit which will negatively impact your ability to get loans and/or credit cards in the future. Negotiating with your mortgage lender can help you come to a solution that avoids this worst-case scenario.

            At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are at risk of losing their homes to foreclosure. We will explain your options and guide you in making the best decision for your circumstances. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.