Determining Hardship

• If you are experiencing hardship due to unaffordable mortgage payments, draft a hardship letter to your lender. Explain your financial circumstances and how they can lead to default on your mortgage. If you are already behind on your payments, explain how your situation led to delinquency by including documentation of your current household budget. Copies of pay stubs, bills and your most current mortgage statement are helpful in verifying the claims made in your hardship letter. Keep your letter concise but descriptive. State that you are looking to refinance your home to help stabilize your monthly mortgage payments.
  
  

Mortgage Assistance Options

• Private and government programs are available to help you refinance to avoid foreclosure. The Neighborhood Assistance Corporation of America. NACA offers counseling services in addition to refinancing your mortgage loan. Unlike other mortgage assistance programs, your NACA counselor negotiates with the lender on your behalf. While your loan is under review with either NACA or Making Home Affordable, the foreclosure process is temporarily halted.
  
  

Qualifying

• To qualify for NACA, the value of your home is not a factor. You must have verifiable income so that the lender can confirm that you are able to afford the loan payments following the refinance. NACA requires that all program participants undergo homeownership counseling and volunteer with the organization after their mortgage is refinanced.
  
  

Considerations

• Lenders proceed with foreclosure if your refinance attempt is denied. However, you can pursue other options to pause the foreclosure process again. Once you are approved for mortgage assistance, the foreclosure process is stopped and your mortgage is considered current. Choose an option that matches your financial background to avoid denial from your lender. If you have no source of income, there are few mortgage assistance programs to help you remain in your home, but the Making Home Affordable program, the federal program for homeowners with a Fannie Mae- or Freddie Mac-backed loan, does offer a special type of forbearance to help you keep your home. Forbearance occurs when your payments are temporarily suspended or reduced.