Call your bank

Even if you think you can continue to pay your mortgage or car payment for now, call your bank to let them know what's happening, bank officials said.

In some cases, the bank will wait before taking any legal action if your payments are late.

"If they've lost their job and there's no source of income, legal action isn't going to accomplish anything," Heartland Community Bank President Steve Bechman said.

They also can agree to reduce payments based on what you can afford. Those agreements can last for 90 to 120 days, at some banks.

Even in the worst-case scenario that you will lose your home, the bank can look at options other than foreclosure.

Banks have the option of a process called deed and lieu, in which they take the home back and forgive the loan, which still is damaging to someone's credit but not as involved and drawn-out as foreclosure.

Every situation is different, bank officials said.

But banks want to hear from their customers so they know if they are laid off or unemployed, not running from their debts, Mutual Savings Bank President Bob Heuchan said.

"If we find somebody difficult to reach, then we start thinking they're running from us, and we always appreciate someone letting us know what's going on," Heuchan said.

While many people can find the number for a local bank in the phone book, it may not be as easy when their mortgage has been sold to an out-of-state company. In that case, people need to call the lender's toll-free number and find a way to speak to a live person, Heuchan said.

He recommended people try to get a representative's name and direct line so they have someone to call instead of trying to reach someone through an automated phone system.

They should document the discussions, including whom they talked to, what they discussed, the advice they received or any action taken.

Those records can be helpful if someone has to call back again so they can explain what has already been done or if they were supposed to get a return call from someone, Heuchan said.

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