To help you find the answers to these questions, you need what's called loss mitigation counseling help. Loss mitigation counseling is help to develop a solution that will allow you to catch up on your payments, modify your loan terms, or otherwise rectify your situation so you can afford to keep your home or lessen the damage caused by a foreclosure. The following section gives you some loss-mitigation alternatives to foreclos- ing to protect your credit history.

Starting with short-term solutions

Perhaps you believe that you have a plan to resolve your problem and, as a result, catch up or at least resume payments in three to six months. If that's the case, consider the following suggestions:

Find a good credit counseling agency. This suggestion has nothing to do with credit counseling; it focuses on getting you an objective assessment of your overall financial picture and whether you can realistically afford your mortgage payments. The counselor can help you build a revised budget that may free up cash for your mortgage, and an expert opinion can help to pri- oritize your debts and expenses. Many agencies are also HUD-certified and can work with your servicer to get a solution that works for your situation.

Ask about mortgage-repayment plans. These plans entail the servicer setting up a structured payment plan (sometimes called a special for- bearance plan) that will get the mortgage back on track in three to six months. Sometimes this deal can be a verbal agreement with your exist- ing lender. If it is, we suggest that you document the terms in a letter and send it to the lender so you're both clear on the terms of what you're doing. Typically during a repayment plan period, full monthly mortgage payments are made along with a portion of the past-due payments until the mortgage loan is back to "current payment" status. The sooner you get a plan in place the less damage you'll incur on your credit report. Check the HUD Web site at www·hud·gov for resources and help.

Don't forget to talk to your lender about your need for assistance -- and do it soon. Some servicers have programs only for borrowers who are not yet delinquent and other programs for borrowers who already are. For the greatest number of options, get started as soon as you know you have a problem making mortgage payments as agreed, and be sure to ask for all the options they have for you.

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