How to Talk to Your Banker When You Can't Pay the Mortgage

We all realize - or we should all realize - that good communication is extremely important to getting through life. If you are having marital troubles, there is a good chance that you are not communicating well with your significant-other. If you are having trouble with your teenagers, you are probably experiencing a lack of communication. So why would business dealings be any different - even your personal business dealings.

I recently had a friend who lost his home to foreclosure. It was devastating to him, not only financially but also personally. He had lost his home, after all. He felt he was a failure.

I felt awful for him, of course, especially because I know that he is a hard worker and had had some bad financial breaks recently. And I was appalled that the mortgage company had not been willing to work with him when things began to get bad. Well ... here was the thing. He had not actually contacted the mortgage company when things started to go wrong. In fact, it was the mortgage company that contacted him, and that was when it was really already too late.

So here's the thing - most banks really do not want to own your home, especially if there is not a lot of equity in it. They want to collect your payments each month and get rich on the interest that they are charging you. If they have to repossess your home not only are they no longer collecting that interest, but they also have to put out a lot of money for the paperwork and various expenses that go hand-in-hand with the foreclosure process. Then they have to sell that house and try to squeeze as much money out of it as they can. And while that house is sitting on the market (which is currently sluggish, to put it politely), they are making no money.