Written By: Hina Habib

Once a borrower gets behind on their mortgage payments, they come to a delinquent borrower category. This happens only if a borrower looses his/her ability to pay their mortgage payment on time. At this point now a borrower has to go for other options if he/she thinks that it is hard for him/her to afford monthly payment in future.

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Before the year 2008, there were only 2 options available for the delinquent borrower to save his/her house. These options consisted of a forbearance plan A and B. Option A gave opportunity to borrower to save his house from foreclosure by paying all the arrears lump sum and start making the regular mortgage payment again. Option B allowed borrower to resume their regular monthly payments after the hardship and the owed balance used to be added towards the principal. These options were only good for the borrowers with temporary hardship. Borrowers having long term decline in the income ended up losing their houses in foreclosure.

FHA borrowers had an option for temporary hardship to make the monthly payments according to their ability and the difference again added to the principal. Example for this is that if borrower calls FHA and tells them that he/she going through hardship and instead of $1000 a month he/she can make $700 monthly payment, use to get approve for this reduction.

Now coming up with the new programs after the year 2009 are Modification, Short sale or Deed of lieu. Best option for any borrower would be Loan Modification. If loan modification does not work for the borrower than instead of losing house in foreclosure, should go through either Short sale or Deed of lieu.

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Short sale has helped not even borrowers but also lenders which saves them a lot of time and money. Recently lenders are offering money to borrowers to short sale their houses instead of letting it go to foreclosure. Therefore best route for any delinquent or suffering borrower is short sale after failed modification.

About The Author

Hina Habib - As an NAMP® staff writer, Hina Habib has been working as a Loan Processor with mortgage industry for more than 15 years now. Hina is a loan processing instructor for Loan Processor University ( She has ample experience of structuring and processing FHA, VA and Conventional loans. She worked with an established Correspondent Lender/ Mortgage Broker for 13 years. After her promotion as a Senior Loan Processor she trained loan officers and other processors. Currently she is working with a strong and established banking institute as a Mortgage Processor II. She is very well informed with the current on going changes in the mortgage history and can help answer your questions more accurately. If you're interested in becoming a writer for NAMP®, please email us at:

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