Financial difficulties are a common problem. People find themselves in situations that are beyond their control that affect their lives and financial stability. Divorce, bankruptcy, job loss, illness, and changing economic conditions are only a few examples of life altering situations that affect our finances.

If you are more than three payments behind in your mortgage payments, your lender or bank has probably already started foreclosure proceedings against you. At this moment, the mortgage lender becomes Public Enemy Number One - their phone calls are avoided, their letters are unopened, and their attempts at communication are avoided at all costs.

Bad move. This approach is opposite from the one you should take - open communication.

At the first sign of financial distress, it is time to contact your lender. Do not be afraid of this conversation - there is more danger in silence than in regular, open communication with your mortgage company. Although you may anticipate your lender is working against you, please remember that the lending partner benefits most by the consistent payment of your mortgage than by taking your property, so their primary goal is to get you back on track.

Be open and honest about your situation. The lender wants to know whether your financial difficulties are temporary or long term - this gives them an understanding of whether to provide a short-term change in your payment total or to pursue another way of obtaining their money.

It is important to get all the correct phone numbers, fax numbers, and addresses of your lenders. All communication MUST be documented - it is in your best interest to create a paper trail of evidence that proves you are attempting to resolve the situation. After speaking with your lending partner, ask for documentation that summarizes your conversation or agreement, and keep these letters in your files.

Also, it is absolutely essential that you communicate with the right person. Speak only to an individual who is authorized to enter into and approve a workout agreement. One of my clients called her lender to confirm the payment numbers of an agreed-upon loan workout. The customer service representative she spoke to had no idea what she was talking about, an immediately began threatening her with foreclosure if she didn't pay the entire amount owed immediately. After she called my office in a panic, I told her to call back and ask for the Loss Mitigation department, and specifically to ask for the person she made the agreement with. The Loss Mitigation department had a complete record of her agreement, and happily gave her the correct payment amount and address to send it to.

It pays to communicate.
If you agree to a delinquency cure, be sure you can comply and be faithful to your commitment. If there is a change in your circumstances, and you cannot honor your agreement, contact your lender immediately.

If your situation is expected to be long term, it would be useless and in bad faith to negotiate a delinquency cure. If you cannot afford your house, DO NOT KEEP IT. The stress of attempting to keep up with payments is truly detrimental to your personal life.