Do Not Lose Your House Without Trying To Save It

Loan Modification Is Now Available From Your Lender.
If you cannot make your house payments, you need to call your bank and ask them to modify the terms of your loan. Call the number on your payment booklet or the number on the bank's website for loan modification. I have heard that it is not a good idea to talk to the bank's normal collections people. Banks have set up special phone lines for people who need their loans modified. When I called for someone, I had no trouble getting through to a person who could help me.

Before You Call, Decide What You Really Need To Have The Bank Do.
You should think about: The monthly payments you can comfortably make. The interest rate you would like to pay. Whether you need to have part of the money you owe just disappear because the money you owe is more than the value of the house.

It Is Better To Ask For Everything That You Want In The Beginning.
In negotiations, it is better to ask for everything you want, even if you think you will not get it. This is especially true if you are asking for loan modification right now. (I am writing this on February 13, 2009.) Right now, the banks are under tremendous pressure to stop the foreclosures on residential property. So all the old rules are gone. Ask for what you need and you may get it all.

Be Prepared To Back Up What You Say With Proof.
The bank will want tax returns, pay stubs, credit card bills, and credit checks. Give them what they ask for if you can.

If You Cannot Do This For Yourself, Pay An Attorney To Do It For You.
Pay the attorney his/her hourly fees. Do not pay someone a percentage unless you really trust that person.

Never hire anyone to negotiate for you that you see advertised on tv or on the internet. You should use a local person, so if you get ripped off, you can find the person who ripped you off. If you can find them, the government will almost certainly force them to refund your money.

Do Not Feel Stupid That You Got Into This Mess.
I do not know anyone who quietly paid off their house so that they could retire without house payments. Some of the most intelligent people I know have house loans they cannot pay for.

Financial advisers were telling people to tap into the equity of their houses. Citibank lobbied for the new bankruptcy law which forces people to refinance their house to pay off credit card debt. Tax policy of allowing only interest deductions on residences tempted people into continual refinancing to keep the interest deduction high. (This is because the interest payment part of a mortgage payment is higher in the beginning of the loan, and almost disappears at the end of the loan.)

Stop Blaming Yourself And Fix The Mess You Got Yourself Into.
This is a society-wide problem. You help us all by saving your own home.