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Mortgage Modification Balancing Act

I completed a loan modification worksheet several months ago, then lost my job. I am about to be reemployed. What should I do?

My husband has been on workman's comp since 12/08, until 5/09 I still had a job. Back in 03/09 I sent in the mortgage refinance worksheet to my mortgage company. I never let them know that I was unemployed, I still have not heard from them 08/09. All I need is $10,000 to get the mortgage caught up. I am starting a new job this week and hopefully my husband should be released to go back to work in the month. What should I do?

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Bill's Answer
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Unfortunately, this is a difficult situation that you must approach with extreme care. If your lender thinks you will not be able to continue making your mortgage payments, it may decide to reject your loan modification application and proceed with foreclosure.

On the other hand, if your lender discovers that you failed to disclose a significant reduction in your income, it could reject your application for misrepresenting your ability to pay.

In my opinion, the most important factor in deciding how you will proceed is how certain you are that you will be going back to work soon. If you are already working by the time the mortgage company begins processing your application, than there is no reason for them to suspect that you were out of work for several months.

If the lender contacts you before you are able to find work, you should be honest about the fact that you have lost your job, although disclosing the fact may result in rejection of your loan modification. The lender will likely want proof of employment, so it is unlikely that you would be able to avoid the issue anyway.

Although no one wants to lose a home, if you cannot afford the payments, there is little reason to continue trying, because if you don't have the money, you will likely end up in foreclosure at some point in the near future despite your efforts to keep the home.

Also, misrepresenting your employment status could be considered mortgage fraud, which can be a serious criminal offense. While you probably donÂ’t want to broadcast the fact that you lost your job, but if your lender asks you about your employment status, you need to be honest, even if the consequences are unpleasant.

If you would like to read more about foreclosure and the options available to homeowners who are trying to save their homes, I invite you to visit the Bills.com foreclosure page.

I wish you the best of luck in your efforts to keep your home, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.Bills.com

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