Homeowners Still Having Difficulty Making Mortgage Payments

According to the Mortgage Bank Association's Mortgage Delinquency Survey, the second-quarter mortgage delinquency rate in 2011 rose to 8.44 percent of all mortgage loans outstanding.

MBA's Chief Economist Jay Brinkmann said, "Mortgage delinquencies are no longer improving and are now showing some signs of worsening."

With a still stagnate or declining real estate market, many homeowners remain underwater, owing far more on their mortgages than their homes are now worth.

If you have missed several mortgage payments and fallen delinquent on your mortgage, below are several options to consider. An Indiana foreclosure attorney can provide additional information about your rights and options.

Modification

Under this option, you reach an agreement between you and your mortgage lender to change the original terms of your mortgage-such as payment amount, length of loan or interest rate. Although this may seem like a good option for many struggling homeowners, unfortunately banks are often unwilling to negotiate modifications with those facing foreclosure.

Short Sale

A short sale occurs when you sell your home for less than the outstanding balance on your mortgage loan. Typically, a short sale must be approved in advance by your lender.

If it is approved, the bank that owns your mortgage agrees to accept the proceeds of the home sale towards the mortgage. The lender may also ask the homeowners to cover an additional portion of the remaining mortgage balance.

Foreclosure

A foreclosure is a legal process where your bank or lender takes ownership of your home. A foreclosure can happen when the homeowner has defaulted on the mortgage by failing to make payments or some other breach of terms of their mortgage obligation.

It is important to note that in Indiana a homeowner cannot actually be forced out of their home until a sheriff's sale of the property. A foreclosure in Indiana takes at least 120 days, and oftentimes longer. Throughout that time period other options remain open to the homeowner, but it is important to act sooner rather than later.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy may be an option if you are unable to make mortgage payments because you are overwhelmed by debt, but you still have a job and income. It will temporarily halt foreclosure proceedings, and allow you time to develop a repayment plan that meets your needs and allows you to keep your home.