| A number of ways exist to end up in a situation | | | | ranks as some of the top ten reasons for |
| that has you facing the loss of your home. Some | | | | entering into a distressed situation when it comes |
| of these you may have control over such as | | | | to a mortgage. It can be difficult paying for |
| overwhelming debt other reasons may be | | | | funeral costs and trying to make ends meet if |
| completely beyond your control such as the death | | | | you are starting out in the work force or simply |
| of a loved one. Whatever the reason it can be | | | | shifting from two incomes to a single income. |
| easy to get into a situation where you are in | | | | Another major reason why people end up having |
| default or having difficulty making payments. | | | | issues with their mortgage is illness. This could be |
| One of the biggest and most preventable issues | | | | simply overwhelming medical bills outside of what |
| that can cause a distressed mortgage situation is | | | | insurance will cover or the loss of wages caused |
| the result of an increase in your mortgage | | | | by being out of work recovering from an illness |
| payment. This is usually the result of your | | | | or injury. While this is not always preventable |
| mortgage going from a fixed rate to a variable | | | | there are usually provisions provided by lenders |
| rate on your interest rate. Many people choose an | | | | for situations involving accident, injury, illness and |
| ARM because of the exceptionally low interest | | | | the resulting time off work. This may or may not |
| rate. However, this interest rate only lasts a short | | | | include loan modification or forbearance options, |
| time before it shifts to a higher and highly variable | | | | which can help, get you over the hill when it |
| rate. This means that every month the mortgage | | | | comes to these particular reasons. Refinance |
| payment changes as interest rates fluctuate | | | | options can also help. As soon as you know, you |
| making it difficult to make payments especially if | | | | may have a problem talk to your lender and |
| you purchased a home outside your means | | | | explain the situation. The sooner you act the |
| because of the deal you received on the | | | | more options are available to you. |
| mortgage. The solution to this is to refinance at a | | | | Taxes are one of the leading reasons people end |
| lower fixed rate mortgage. | | | | up with issues. Especially if those taxes are |
| Losing a job or having a business fail may or may | | | | associated with an inheritance, this is especially |
| not be preventable but they both can cause | | | | true when the taxes outweigh the cost of the |
| issues with your mortgage. Many people do not | | | | inheritance leaving you to pay the difference. This |
| think what will happen if, when it comes to losing | | | | could put and unwanted strain on finances that |
| a job or having a business fail. It is important to | | | | can leave you facing difficulties with your |
| know what your options are in these situations | | | | mortgage. |
| you may want to request a loan modification, a | | | | One of the top reasons in fact it could be ranked |
| refinance if this might lower payments or even a | | | | number one or two that people have issues with |
| forbearance if one if available. You should not wait | | | | their mortgage is when they go through a divorce |
| to act since these situations tend to cause | | | | or separation. There are a lot of various financial |
| situations where you could lose your home. Being | | | | issues that come up during these situations. This |
| proactive in these situations is usually your best | | | | can but a strain and force a situation where there |
| defense against the threat of foreclosure and | | | | is a danger in losing the house or defaulting on the |
| other problems with your mortgage. It can also | | | | mortgage. Going form a double to single income |
| help to ensure that your loss of job or failed | | | | household can also cause this to occur. |
| business does not compound by loss of credit. | | | | Finally attempting to maintain the mortgage on |
| Most insurance policies do not cover for | | | | two homes is doable provided you have the |
| everything and even if they cover flood, fire, and | | | | income or the cash flow, such as renting out the |
| natural disaster when it comes time to file the | | | | one property while you are selling it, occurs. |
| claim it may not be enough to do all the work | | | | However, many people end up running into a |
| that is needed. When this happens, you may end | | | | situation where they may have to relocate, for |
| up in a serious situation. You could end up with a | | | | example, because of work and cannot sell their |
| home that is not livable, that you cannot fix up | | | | home before they move. This can cause them to |
| and cannot sell for what you have in it leaving | | | | overextend themselves by purchasing another |
| you in a distressed situation. Many people do not | | | | home or even maintaining another home as a |
| realize that their coverage may not be enough to | | | | rental while still dealing with the mortgage |
| replace their home. This is because the majority | | | | payments for the first home. This can leave |
| of people choose options that are more | | | | many people in a financial bind especially if they |
| affordable but may offer less coverage than | | | | cannot sell the home in a reasonable amount of |
| options that provide for the replacement of the | | | | time. |
| home in case of property damage. | | | | These are just some of the reasons you may |
| The death of someone close to you can be | | | | experience a situation involving a distressed |
| devastating and can often lead you in a financial | | | | mortgage. While many of these situations are not |
| bind especially if that person was generating the | | | | preventable causing your mortgage to go into |
| income for or part of the income for your | | | | default, in many cases can be if action is taken |
| mortgage. This is why death of a spouse, | | | | quickly as soon as the problem arises. |
| significant other, family member or close friend | | | | |