DOLLARS AND SENSE

Common sense answers to questions on personal finance

by Joe Plemon 

Q: Joe,  my mom, who is five months behind on her mortgage payment,  just got a letter from the bank saying they are going to start foreclosure.  The reason she is behind is because she lost her job and has not found another one yet.  Her payment is $700 a month.  My husband and I could help a little, but we have our own family to be thinking about.  What could we be doing to help? 

A:  Even if you could afford to make all of her back payments, you have not helped her until she finds work and is able to stay current on her own.  The best help you could give her right now is some good advice.  But tread gently.  Parents often do not want the advice of their children, so ask her if she is open to talking about her problem.  If she is, these tips should help:

·         Communicate with the bank.  She needs to go in person, explain her situation, and ask if the foreclosure can be delayed until she is back on her feet.

·         Find work…any work.  Right now, she can’t be selective.  The bank may offer her a forbearance (plan to get caught up), but it will not help if she has no income.

·         Prioritize her finances.  Once she has income, the house payment, groceries and utilities should be paid before anyone else.    

·         Put the house on the market, using a high power real estate broker.  If foreclosed, the house is going to be sold at auction anyway, so she needs to keep control of the sale.  She also needs to notify the bank that she is trying to sell the house because they are more apt to work with her if they can get their loan money without having to foreclose. 

This is a stressful time for your mother.  Your money is not what she needs right now, but your counsel and emotional support could prove invaluable.