- 1). Apply for loan modification. Financial institutions offer loan modification programs to homeowners with large amounts of debt. Total debt obligations must exceed 55 percent of the family's income in most cases, according to CNN Money. Contact your lender directly to apply. If approved, mortgage payments will be reduced.
- 2). Negotiate a catch up plan. Missing several payments can add up to thousands of dollars. Instead of paying a large lump sum (which is difficult to do), ask the lender about paying a little each month. This will move the account out of default and restore your good credit standing with the lender.
- 3). Apply for forbearance programs with your lender. People with serious illness or unemployment may qualify for forbearance. A forbearance program allows you to skip mortgage payments for a specific amount of time without hurting your credit. Apply with the lender and provide proof of your circumstances.
- 4). Contact your lender to ask about the HomeSaver Advance Program. Loans backed by Fannie Mae qualify for this program. The HomeSaver Advance Program gives borrowers with serious financial issues a personal loan to catch up on missed payments. Catching up on payments will take the loan out of default status.
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