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Are you facing mortgage problems? Perhaps you’re concerned because the interest rate on your adjustable rate mortgage has jumped sky-high – or is about to. Or maybe you’re under water, meaning your home is now worth less than the mortgage balance. Or maybe you’ve suffered a loss of income, making it hard for you to meet the monthly payments.

Well, you’re not alone. Millions of others are in the same boat. There are many ways to address your mortgage problems. In some scenarios, you wind up keeping your home. In others, you don’t. This column explains some common approaches. Your lawyer or a nonprofit agency can guide you to the best solution for your individual situation.

First, this warning: Beware of foreclosure rescue scams. Walk away from any person or organization that requests money upfront for counseling you or getting your mortgage modified. Be especially cautious of people who promise to save your home if you deed it to them.

Equally important, never make your mortgage payments to anyone other than your mortgage company, unless the mortgage company approves in writing.

Loan modification

Some lenders today are willing to modify the terms of your loan instead of foreclosing on the mortgage. They’d rather not get stuck with another empty house to deal with. You’ll need to contact the lender’s loss-mitigation department to discuss the possibility of new terms. This can include extending the length of the mortgage, lowering the interest rate, or reducing the loan balance.

Under a program called Home Affordable, the federal government has granted incentives to lenders to modify a mortgage if the homeowner meets certain eligibility requirements. You may qualify if:

• You own and occupy the home that’s subject to the mortgage
• The principal balance is $729,750 or less
• Your loan originated on or before January 1, 2009
• Your mortgage payment (including taxes, insurance, and association fees) is more than 31% of your gross monthly income, and
• You have a mortgage payment that’s not affordable because of a significant change in your income or expenses.

Contact your loan servicer for further details. You can also get information online at makinghomeaffordable.gov. It’s estimated that one in nine homeowners will qualify for loan modification or refinancing under this program.

Remember, however, that participation by the lender is voluntary.

REFINANCING

You may be able to refinance your loan by getting a new mortgage with lower interest. This is a possibility if your credit is good. And if you qualify, the government’s Home Affordable program may help you. The refinancing part of the program is available only if you current loan is owned by or securitized by Fannie Mae or Freddie Mac. If you’re not sure whether it is, you can check it out at the Web site referred to earlier.

You may qualify if:

• You own and occupy the home
• You’re current on your mortgage payments.
• You believe the amount you owe on your mortgage is about the same or slightly less than the current value of your home
• You have sufficient income to make the new mortgage payments, and
• The refinance will improve the long-term affordability or stability of your loan.

Under the federal guidelines, being current on your mortgage payments means that you haven’t been more than 30 days late on your payment in the last 12 months. Or, if you’ve had the loan for less than 12 months, that you’ve never missed a payment.

SHORT SALE

The idea in a short sale is that you convince the lender to accept whatever proceeds you get from someone who purchases your home – and to cancel the mortgage.

The first step is to find a buyer for your home. Make the sale contingent on the lender approving a short sale. Then, submit the sales contract to the lender for approval. The process can take several weeks – or even months – so you need a buyer who can be patient.