Be Proactive !
If it’s unavoidable for you to miss a mortgage payment, call your lender beforehand. A lender that holds your mortgage in its portfolio will likely have more flexibility than one that sold the loan, but many are willing to assist borrowers when possible—especially when there are extenuating circumstances. “It’s my credit risk, my judgment and my experience that says what’s the best way to work with the borrower,” says Scott Witherspoon, chief credit officer of Affinity Federal Credit Union, a portfolio lender in Basking Ridge, N.J. Possible solutions to avoid foreclosure: Selling the house and paying off the mortgage if there is sufficient equity; a mortgage modification that offers lower payments or interest rates; or, for more serious delinquencies, a short sale or deed in lieu of foreclosure.
Control the credit you can !
Even if you’re delinquent on your mortgage, you can still exercise significant control over your use of credit—and ultimately, rebuild your credit score. Make payments on credit cards and other loans on time, and keep your credit utilization rate down by using no more than 30% of your available credit. “That shows that you’re using credit responsibly,” Ms. Hardeman says.
Consider credit counseling !
Borrowers who can’t create a budget or have trouble sticking to one might benefit from credit counseling. The National Foundation for Credit Counseling has a directory of accredited firms.“There is no hard-and-fast rule where I would say that under no circumstances would someone who’s had a delinquency on a jumbo loan ever be approved again.”