The Mortgage Mess Part 3

Dirty Hands are nothing new to Billy Byrd but recently it's become a daily thing.

"I've worked a lot of hours I know that," said Byrd.

Working on site with his company Homesite Contractors saves money. That's important because last year Byrd took out $700 thousand dollars in loans to build one home to live in and another to sell.

Byrd says the second home hasn't sold yet and the extra mortgage has caused him to miss some payments.

"The way my income has been there's no reason I should have been $700 thousand in debt and two houses."

Financial experts say cutting costs is one of the first things you should do if you can't pay your mortgage.

"If you call the mortgage company early and let them know you're having problems they're more likely to work with you," said Woodbine Community Center housing counselor Rod Williams.

He says an early call may convince lenders to work out a deal for you to pay off your missed payments. Williams also says don't give them your financial information when you call without asking for a workout packet and going over it with a counselor.

"If their budget can show they can afford their house payment they have a much better chance to work with the mortgage company than if they just call the mortgage company and tell them all their bills and when the mortgage company adds it up they have excessive debt," said Williams.

Other potential options, your lender may agree to a forebearance, where you pay a lower mortgage payment for a period of time. Or they may let you work out a reinstatement, where you pay the total amount you're behind in one lump sum by a specific date.

If your lender won't work with you, another option might be filing for Chapter 13 Bankruptcy. That however, only helps if you're simply behind on payments you can eventually catch up on says Bankruptcy attorney Mary Beth Ausbrooks.

"We have to turn people away. We have to tell them Chapter 13 is not feasible," said Ausbrooks.

Ausbrooks says Bankruptcy can't help you reduce your mortgage payments but it can help you get back on track if you need to refinance to a lower interest rate.

"So long as they've been in it for a year stayed on the job and made those payments they will be able to refinance when outside of bankruptcy they can't refinance."


The Mortgage Mess Part 3