Loosing Your Home After Rehab

Loosing Your Home After Rehab

Many people look at home ownership as the cornerstone of the American Dream.  But what happens after rehab with you home?  What options do you have if you have lost your job?  How long can you anticipate continuing to live in your mortgaged home if you can not make the payments?  Are there any special options for people that are fighting drug addition?

If You Don’t Pay Your Mortgage

Most people are aware that if they do not pay their mortgage on their house, there will be some repercussions.  Many homeowners are not sure of what those repercussions are.  Any time you borrow money, for the direct purpose of buying a home (using the home as collateral) you will have a mortgage.  There are clauses in your mortgage that lay out the process that takes place if you fail to pay.  As a general rule, the mortgage company will report you to a credit agency after being 90 days delinquent.  After that, starts the foreclosure process.

What If I Have Lost My Job Due To Drug Addition

Regardless of why you are not paying your note on your home, most lien holders will report you to multiple credit bureaus.  That DOES NOT mean they will move forward with foreclosure.  Upon the second or third month of not paying your mortgage payment, you should be speaking with the bank. That is where you can talk about your drug addition and tell your story. This is an important part – as the bank DOES NOT want to foreclose on your property.

State Your Case

Tell the person that is handling your account you story of addiction and about your stay in rehab.  Going to rehab shows that you are making the best attempt to get your life straight and maintain sobriety.  Tell about your success stories and your remission since rehab.  Discuss your road to recovery and point out how you intend to pay them.

Get Letters From Your Rehab

If you are looking down the barrel of foreclosure and you have successfully completed a stay at a rehabilitation center, it can be very helpful to get letters from your Doctors and drug counselors.  They will generally not have any problem writing these letters, referring to your character, to assist you with keeping your home.

Move Your Past Due Payments To The Rear

This may come further down the road as you are starting to make payments again, but plant the seeds in initial conversations with your lender.  They may allow you to put your past due balance, which may be 3 or 4 months of mortgage payments, to the end of your mortgage.  This lets you get “caught up” much easier and simply extends the length of your mortgage by a few payments.  After Hurricane Katrina with all of the flooding in Louisiana, the US government issued a rule that put the pressure for banks to provide this.  Since then, the lending institutions have these protocols in place and can put your overdue mortgage payments to the rear of your loan.

Look For A Job

Its critical to be actively searching for a job. In many instances, you will need to be actively searching for employment to obtain unemployment benefits.  These benefits can potentially assist you in making your mortgage payments as well as providing some much needed income.

Get Your Home’s Value

When dealing with your mortgage company, they will only refer to the balance that you owe them.  It important to know that real estate has value.  That value may or may not be what you owe on your home.  You homes true value may not have any relevance to you actual home value.  The reason that this is important, is because if you owe substantially MORE than what your home is worth, the bank DOES NOT WANT TO FORECLOSE ON YOU.  In this instance, the bank will not get their money by selling your home.  This puts the negotiations in your favor when you are talking to them about not foreclosing on you!  You can get a general idea on nationwide property values by following the Case-Shiller Home Price Index.  You can also get a more detailed estimate of your homes value by looking at Zillow.

Stay in Contact With The Bank

The single most important thing you can do is keep lines of communication open with you bank.  If you don’t stay in constant communication, they will simply foreclose on your home.  This may be uncomfortable, but it MUST be done.

Avoid Foreclosure