You’ve worked hard to own your home. But if you’re having problems paying your bills, particularly your mortgage, you may be eligible to take advantage of new options to reduce the amount of your monthly payments or refinance your mortgage. There are many resources designed to help you keep your home, but beware of signing over your deed or making payments to an organization other than your mortgage company.

• The mortgage modification option calls for mortgage providers to reduce a qualifying homeowner’s monthly mortgage payment to no more than 38 percent of the homeowner’s pre-tax income. To hep reduce that payment further (to 31 percent), the government would supply funding. In order to qualify, the unpaid principal loan balance can be no more than $729,750. You must have proof of income, including two recent pay statements and an affidavit of financial hardship. The program ends December 21, 2012.
• Refinancing may be an option if your home has little or no equity and if the foreclosure costs would be higher than the costs to modify they mortgage. An appraisal may be necessary for this option. Under this option, your mortgage must be held or owned by Fannie Mae or Freddie Mac and you must have a good payment history. Contact your lender for details.

More details can be found about the Obama Administration’s plan for helping homeowners on the Making Home Affordable and Financial Stability web sites.

A Word of Warning
Remember, if you receive a notice from your lender, open it and contact the company immediately. Be aware of scams - if someone says they only charge a small fee or require you to sign over the house deed to an outside organization in order to save it from foreclosure, walk away. Work directly with your mortgage company and never submit payments to anyone other than your mortgage company

There are many other resources designed to help you keep your home.

• The U.S. Department of Housing and Urban Development has free housing counselors who can help you assess your financial situation and work with your lender. Call (800) 569-4287 or TTY (800) 877-8339.
• HOPE Now, an alliance between HUD approved counseling agents and mortgage companies, provides free foreclosure prevention assistance.
• A local or state housing office organization can help educate you on your city’s or state’s housing laws.

Owning a home is a tremendous responsibility. If you are dealing with unforeseen economic hardships, the prospect of losing a home can be very troublesome. Don’t give up - there are help and resources out there if you need them.