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Do’s and DON’Ts of Falling Behind on Your Mortgage


Our economy is improving day by day, but the after-effects of 2008’s mortgage bubble are still being felt by many people. Every day people face the nightmare of foreclosure, damaged credit and difficulty buying a new home or car, or even maintaining a job. It is vital to know what to do and what not to do, should you fall behind on your mortgage.

DON’T Ignore Lender Calls

When you are behind on your mortgage, it can be tempting to dodge those collection calls. After all, you are embarrassed, and frankly if you had the money you would be paying. However, this is the worst thing you can do. If you talk to your lender, you might find they are calling to offer you options to get straight without the damaging effects of being behind.

DON’T Deed Your Property

There are a lot of foreclosure scams out there that promise to fix all your problems if you sign your property over to a third party. Some claim this is a magic fix — that by handing over your house, you will no longer owe the money. Others promise to take over your payments. These claims are almost always scams. Never, ever sign your house over to a third party.

In fact, never let anyone take over your mortgage without express approval from your lender. Only your creditor has the ability to release you from liability, not a third-party miracle-working company.

DON’T Fall for Foreclosure Scams

There are a ton of scams out there designed to steal homes from those who are in a mortgage crisis. Be wary and keep your guard up. If something seems too good to be true, it probably is. Do not be afraid to ask questions and do your homework.

DON’T Sign What You Don’t Understand

Paperwork can be blinding and scary, and for good reason. Contracts and agreements are often full of confusing legalese and are specifically designed to confuse the unwary. If you do not fully understand a document, don’t sign it! Never be afraid to have an own attorney or qualified real estate agent look over any paperwork. Question what you do not comprehend. Remember, ignorance is not a valid defense. Once you sign, a contract is binding.

DON’T Strip Your House

Many people do not realize this, but removing the copper pipe from your home to make a quick buck can be viewed as a crime if not done under the right circumstances, such as after a renovation. Never think that you can simply strip your house to pay a debt. You could end up facing jail time.

DON’T Get Further Underwater

Refinancing your home can be a great idea, but be careful it doesn’t get you further in trouble. Never, for example, refinance your home for more than it is currently worth, and never bow to pressure from a debt collector. Refinancing should be done because it is right for you, not because it is right for a collection agency.

DO Seek Counseling

There are many counseling organizations approved by the United States Department of Housing and Urban Development (HUD), which can provide you with information and help concerning home ownership, including what to do if you have trouble paying your mortgage.

DO Contact Your Lender

You may be surprised to discover that there are options available to save the day. Many lenders will be willing to offer refinancing deals that can significantly lower your monthly payments. Compare the potential of refinance with the cost of your existing loans.

If you can get a lower rate, and a longer repayment term, you might find you are right back in the black. Furthermore, your lender will look very favorably upon you for contacting them immediately and will be far more willing to work with you than if you avoid their calls.

DO Contact Us

The simple dos and don’ts of mortgages basically involve playing it smart and straight. Avoid scams and pitfalls and work with your lender to get right. If you would like advice about dealing with your own mortgage problems, we can help. Contact Salt Lake Homes for Cash for more information today!


What to Do When You Are Struggling to Pay the Mortgage: Utah Homeowners

What to Do When You Are Struggling to Pay the Mortgage

Falling behind on your mortgage is a scary proposition — and if you live in Utah, the rapid, court free foreclosure process may make it difficult to hold onto your home, your most valuable asset. Fortunately, there are plenty of options to explore that can allow you to avoid the heartache and financial damage caused by a foreclosure. Learning about your options can help you find the best solution for you and your family — and get a fresh financial start as well.

What Type of Mortgage Do You Have?

Knowing the mortgage type you have is a key part of determining how to handle your mortgage and home and what to expect from your lender. Depending on the type of loan you have, you may be able to refinance, get a forbearance or deferral or come up with a short term repayment plan designed to help you catch up if you are behind on payments. Most mortgages fall into one of these categories:

Fixed Rate Mortgage:

This is the loan type you most likely think of when you hear the word “mortgage”. In a traditional fixed rate loan, your principal and interest payment remains the same over the course of the mortgage, though the escrow rises over time. Fixed rate mortgages can be for 10, 15, 30 or 40 years.

Adjustable Rate Mortgage (ARM):

With this loan type, the interest rate can vary over the life of the loan; your payments may go up or down each year based on current interest rates. An ARM is often considered a good option for consumers who need a short term solution or who plan to refinance after a year or two. There is an element of risk involved as interest rates – and therefore the mortgage payment – – can rise without warning.

Hybrid Adjustable Rate Mortgages:

A hybrid ARM combines the best of both worlds, as the interest is generally fixed at the front end or first few years of the loan and adjustable toward the end of the loan.

How Far Can You Fall Behind On Your Mortgage Before You Risk Foreclosure in Utah?

Every state sets its own rules regarding foreclosure, and some states require lenders to sue homeowners who are behind on payments in court to foreclose. Utah is considered a non-judicial state, which means that your lender can opt to sue you in court to foreclose, but they don’t have to. Once you are behind by 30 days or more, your lender can file a Notice of Default to begin the non-judicial process. Most lenders simply meet the following guidelines and foreclosure happens automatically, without court involvement, in about 4 months:mortgage-late-slc

  • The lender must notify the borrower that they intend to foreclose and sell the property; they will need to provide a notice of default.
  • Once notified, the buyer has three months to refinance, sell or catch up on payments before the home is listed for sale.
  • Deficient judgments are optional and require a separate lawsuit; if your lender sells your home for less than you owe after foreclosure, they can pursue you for the difference, but only by filing a lawsuit to do so; they must file suit within three months of the foreclosure.
  • Once your Utah foreclosure takes place, you will have 10 days to vacate your home.


I’m Behind on My Utah Home Mortgage, What Are My Options?

Since Utah has such a rapid foreclosure process and your lender is not required to sue you in court, you must act quickly if you are behind. Calling your lender is the first step in the process and creating and keeping an open line of communication will help. The longer you wait to call your lender, the fewer options you will have.

Depending on your lender, your loan type and your situation, you may qualify for one or more options. You can try one or more options at the same time to increase your chance of success; since Utah has such a short foreclosure timeline, it is imperative that you act quickly to save your home.

  • Making Home Affordable Modification Program (HAMP):

    HAMP is a federal program that can help you catch up and resume making payments on your home, if you meet the guidelines. You can apply for a HAMP modification if you have experienced financial hardship, opened your mortgage prior to 2009, are in danger of falling behind on payments or in danger of foreclosure and if your mortgage loan amount is under the $730,000 limit.  While HAMP is a beneficial program and has helped many homeowners, the application and approval process can take some time; begin the HAMP process right away if you are concerned about foreclosure.

  • Reinstatement:

    If you are far behind and in danger of going into default, you have the option of getting reinstated by making a payment to catch up. If you can borrow from another source, this may work for you in lieu of a modification or repayment plan.

  • Repayment Plan:

    You may be able to work with your lender to come up with a repayment plan to allow you to catch up. During repayment, you’ll pay your regular mortgage payment plus a portion of the amount you are behind, so your payments will increase for the next 3, 6 or 9 months. If you have the income to afford the temporarily higher payments and were behind because of a short term problem like a job loss, repayment is a great option for you.  Pursuing a repayment plan while trying other options at the same time can help you find a solution quickly.

Avoid Defaulting on Mortgage or if You Are Risking Foreclosure

If you can’t catch up and are not eligible for a HAMP modification, you should still attempt to find a solution. While every lender is different, the following processes may work for your loan:utah-foreclosure

  • Forbearance:

    Forbearance allows you to take a break from paying your mortgage, or forgives your already missed payments, allowing you to become current again. The obvious benefit is that you reset the clock and become current without paying any extra money. While forbearance is an ideal option for the homeowner, many lenders refuse to grant forbearance, opting instead for repayment or foreclosure.

  •  Mortgage Modification:

    HAMP is just one of the mortgage modifications available to you. You can speak to your lender about your options, seek out other lenders to fully refinance your loan or look for modification programs that suit your personal history and credit profile.

  • FHA Home Affordable Modification Program:

    If you have an FHA loan you may be eligible for modification under this FDA specific loan. Other guaranteed loans, like the USDA loan may be modified as well.

  • Bankruptcy:

    Chapter 13 bankruptcy helps stressed homeowners in two ways. When you file for bankruptcy protection, the pending sale of your home is cancelled and you have the time to make repayments. If you are sure you can afford the regular payments and intend to stay in your home, chapter 13 can be a good option, provided you file quickly.

  • Short Sale:

    You may be able to work out a short sale with your lender if you owe more money than your home is worth. A short sale gives you the opportunity to sell your home for less than you owe and avid foreclosure. This is a good option if your home has dropped drastically in value and won’t sell for what you owe on it.

Don’t Fall Prey to Mortgage Scams

While there are plenty of legitimate lenders and programs available to you if you are behind and facing foreclosure, there are individuals who will take advantage of you at this difficult time. Watch out for these common mortgage scams and protect yourself and your most valuable investment:

  • Equity Skimming and Stripping:

    Designed to rob you of your home’s equity, an unscrupulous lender “helps” you by offering you a loan that you can’t afford, then forecloses promptly when you miss a payment.

  • Bait-and-Switch:

    A lender may offer you one appealing interest rate and loan payment – but when it is time to sign the papers, a much higher rate, huge added fees and bigger monthly payments are revealed.

  • Lease Back Scheme:

    A person or individual pretends to take over your mortgage and then rent your home back to you – you’ll end up paying your monthly payment to the scammer and getting even further behind.

  • Fake Legal Help:

    An attorney or counselor offers to defend you in court and prolong your mortgage – for a monthly fee. You end up paying a hefty fee each month, and the counselor or legal team does nothing to repair your mortgage situation.

The Benefits of Selling Your Home for Cash in Utah

If you are sure you can’t make your monthly payments, have decided you can’t afford your home, or simply want to avoid foreclosure, we will give you a fair cash offer for your home. A quick cash sale allows you to get rid of the stress you’ve been facing, eliminate your mortgage and free you from a tough situation.

Unlike a traditional realtor, we don’t charge a commission – and we pay all closing costs. When you decide to sell your home for cash, you’ll be dealing with a local, Utah based company; we’ll handle all the paperwork and have everything you need sent to you. Since you are not dealing with a mortgage company or bank, we can help you resolve your mortgage and home issues with ease, allow you to get out from under an oppressive payment or loan and get the freedom you need to start over.

If you are tired of struggling with high monthly payments and are ready to break free, we can help you get a fresh start. Contact Salt Lake Homes for Cash, and let us know what we can do for you.


How Does Foreclosure Work In Utah?

How Does Foreclosure Work In Utah-

You got the keys and moved into your home. When suddenly, the unthinkable happens! You’re laid off your job, or maybe you had to come up with a large sum of money for a medical expense. Many situations that happen to numerous people every day can lead homeowners to fall behind on their mortgage payments. If you are unable to make the payments on your home on-time, you may be faced with a foreclosure.


What Is Foreclosure?how foreclosure affects credit score

Foreclosure happens when a homeowner defaults on their home loan payments, tyoically this leads to the property being seized by the bank or sold at auction. Usually a notice will be filed after missing 3-4 house payments.


What is the Foreclosure Process in Utah?

  1. A judicial foreclosure requires the lender to obtain a writ of execution that requires the homeowner to sell the home to pay off the debt to the lender
  2. The county sheriff schedules steps that lead to a foreclosure auction sale
  3. The deed of the home is awarded to the highest bidder after a period of 6 months – during which time; the property owner can reclaim the property. In order to get a home back from the auction purchaser, you must repay an amount equal to 106% for which the property was sold for.


Avoid Foreclosure – Sell Your Home for Cash in Utah

You don’t have to hold your breath waiting to see what the highest bidder will offer you at auction, Salt Lake Homes for Cash will buy your Utah home today. Not only will we make you a fair offer, we will pay all the closing costs. Contact us today to see what we can do to help you avoid the negative mark that foreclosure puts on your credit report.