73-year old James Bruce found an unusual way to pay his mortgage when he got behind -- he robbed 3 banks at $600 a pop to come up with the cash. The guy probably had other alternatives -- he had run through his retirement and so he and his wife only had Social Security to live on and the earnings they could eke out from a small pottery business. He was too embarrassed to ask his lender for help (but apparently not too embarrassed to rob banks!). But Mr. Bruce had options -- he didn't have to rob banks to save his home.

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When you can't make a mortgage payment, don't be embarrassed, and don't hide the truth. Mr. Bruce claimed that he had a plan for paying the money back that he stole. He could more easily have requested a forbearance from his bank. A forbearance allows you to skip one or more mortgage payments; the late payments are just added to your balance.

Mr. Bruce had his home for twenty years and never missed a payment. Odds are that he has substantial home equity. A reverse mortgage can pay off a small mortgage balance, relieving the homeowner of the payment, and maybe even put some cash back in the borrower's pocket.

Bad credit wasn't his mortgage problem -- so his lender would have been more likely to help. If he didn't have equity (maybe he borrowed against his home over the years) he might have mortgage insurance. In that case, he might have been granted a claim advance by his insurer -- bringing his mortgage current. That only works to cure a temporary problem, however. A permanent problem requires a permanent solution.

When the homeowner has experienced a significant reduction in income, a mortgage modification may be the best alternative. Mr. Bruce could have used a mortgage calculator to see if taking his remaining mortgage balance and getting a new loan with a 2% rate and a 40-year term would get him a payment of no more than 31% of his gross income. In fact, HAMP underwriters may be able to "gross up" the Social Security income (multiply it by 1.25% if it isn't subject to income tax) to make qualifying a little easier.

The biggest problem with Mr. Bruce's way out (aside from the fact that it was illegal, duh) is that it was only temporary. What was he going to do next month? Rob a train? Knock off a liquor store? Set up a meth lab? The bottom line is a permanent reduction in income can only be solved with a permanent reduction in payments.