Delinquent on Your Mortgage? Don’t Hide

If you've ever missed or been a little too late with a mortgage payment, you've been involved in the foreclosure process. Don't hide: Keep communicating with anyone that might be able to help you turn things around.

Mortgage delinquency, when a homeowner fails to make a mortgage payment, is the first step in the foreclosure process. It can be frightening to receive that letter from your lender, but if you need to make payment arrangements to catch up, you do have options.

According to real estate firm Zillow, foreclosures will be a factor impacting home values in the next several years. Of 10,000 homes in Philadelphia, 13 homes are foreclosed. Overall, the percent of delinquent mortgages in Philadelphia is 9.3 percent, which is higher than the national figure of 6.9 percent.

In comparison, the percent of delinquent mortgages in Chicago is 7.6 percent – still higher than the national rate but much lower than Philadelphia.

As painful as it might be to open up, continue discussing your situation and asking for assistance. Lenders really aren't looking to take your home. It costs them plenty to move through the entire foreclosure process; lenders are in the business of making money, not spending it. Ask if there is a loan modification program you might qualify for and be ready to talk honestly about your finances.

If loan modification isn't possible, there are other options. The Pennsylvania Housing Finance Agency might be able to offer assistance, for example, through its emergency mortgage assistance program. Or, if you used a mortgage broker to finance your home, they might know of additional places that can assist you. Because all these potential options take time, it's important to begin seeking help as soon as you realize you're in over your head.

Remember, too, that you're not alone. Many people are still struggling despite the slow upturn in the economy.

With U.S. home values having fallen by more than 20 percent nationally from their peak in 2007 until their lowest in late 2011, many homeowners are now underwater on their mortgages – meaning they owe more than their home is worth. The percent of greater Philadelphia homeowners underwater on their mortgage is 26.2 percent. In the Philadelphia metro, that number is 20.1 percent.

Underwater homeowners who have maintained their credit but aren't able to refinance their mortgage can still take advantage of the Home Affordable Refinance Program which was recently extended.