By Pamela Kramer
Your mom and dad have always counted on selling their house and buying a cheaper place to finance their retirement. But the value has dropped, and they can't find a buyer. Your parents have missed several mortgage payments and could be facing foreclosure.
Get the name of their lender and call immediately to find out what their options are for getting back on track. Most mortgage firms will work with delinquent borrowers by negotiating new payment plans or refinancing their loans at lower rates. "The sooner you get in touch, the greater chance you have of saving their home," says Pond. Be prepared to explain why your parents haven't been able to make their payments and to provide information about their overall assets and liabilities.
If you don't want to negotiate with the lender yourself, have a housing counselor do it for you. The Department of Housing and Urban Development (hud.gov) offers free or low-cost help nationwide, and its new Hope for Homeowners program provides 30-year, fixed-rate Federal Housing Administration mortgages for those at risk of foreclosure. In the meantime, help your parents sort out their bills and determine which ones need to be paid immediately. Call their unsecured creditors (such as doctors, dentists, etc.) and ask to postpone or reduce their payments.
If foreclosure is inevitable and your parents owe more on their loan than their home is worth, consider a short sale, where the bank agrees to accept less than the loan balance. Another possibility is filing for bankruptcy, which would allow your parents to keep their home and eliminate at least some of their debt. Contact the National Academy of Elder Law Attorneys at www.naela.org to find a lawyer who can help all of you decide what's the best course of action.
Originally published in the February 2011 issue of Family Circle magazine.