We’ve got more house than we can afford and are having a tough time selling in the current market. Help!

Of course, if you’ve followed the news at all over the past year, you know that you are not alone in your predicament. That may be cold comfort, but it also means that you can learn from others’ mistakes.

It’s important that you face the problem. If you are already late with your payment and have been receiving inquiries from your lender, contact them and explain your situation. Lenders rarely want to foreclose on a home, but they need your help to develop a plan.

Is refinancing an option for you? Obviously, lending standards have tightened considerably, but the government is doing all it can to prime the pump — and mortgage rates are low. Will a new fixed mortgage allow your housing expenses to fall within no more than 35% of gross income? If so, this may be your best option.

If standard refinancing isn’t an option and your financial problems are temporary, see if your lender is amenable to a forbearance agreement. This provides the borrower an opportunity to get current with the lender within a specified period of time. If you go this route, you need to be sure you can turn your situation around within that time frame.

If keeping your home is no longer viable, it’s still a good idea to avoid foreclosure so as to minimize the impact on your credit rating. Two common options include getting your lender to agree to a deed in lieu of foreclosure or making a “short sale.” In a “deed in lieu” transaction, the borrower voluntarily hands over the property with the lender’s agreement and negotiates with the lender regarding any net amount due. In a short sale, a home is sold for less than the mortgage, and a payoff agreement is negotiated between borrower and lender.

As you consider your options, make sure to take advantage of government-provided resources. The U.S. Department of Housing and Urban Development has a wide array of resources, including HUD-approved counselors across the country. Visit its website at Hud.gov. In addition, the federal government, in conjunction with industry, recently created the Hope Now program to help homeowners avoid foreclosure. You can find out more at HopeNow.com.

Due to the complexity of these transactions, you’ll need to work with a real estate attorney or other reputable expert. Put your situation in prayer and remember Proverbs 24:3 — “By wisdom is a house built; by understanding is it made firm.”

God love you!

Phil Lenahan is online at