Ah, if only the rest of the country had a sweet 4 percent unemployment rate like Duluth’s. Sure, nationwide the rate has fallen but there are more than 94 million Americans not in the workforce. Layoffs still occur, even in Duluth. In fact, this morning brings news that Enbridge here in Duluth “will reduce its workforce by 5 percent,” according to MPR’s Dan Kraker.
So, what happens to your bills if you’re among those pink-slipped? Most important, how will you keep that roof over your head until you snag another job?
Instead of hiding from your lender, be upfront. But, first, get a clear picture of your finances – how much money will come in and how much goes out. Then contact your lender, advise them of the situation and propose a plan based on your new budget.
If you know you’ll be returning to work by a certain date, request forbearance. If your employment situation is murky, ask for a five-year loan extension. What this will do is lower your monthly payment.
Not all lenders are amenable to these requests, so have a backup plan. If you begin missing payments and are headed for foreclosure, ask if the lender will consider a deed-in-lieu of foreclosure or mortgage modification.
The idea is to avoid the credit dings that will occur with a foreclosure or short sale.
The United States Department of Housing and Urban Development (HUD) offers free foreclosure avoidance counseling services right here in Duluth through Lutheran Social Services/CCCS of Duluth. Call them at 800-777-7419 or 218-529-2227.