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Money Coach Bill Stanley said many people still are having problems paying their mortgage each month.

Some are underwater -- meaning that they owe more money on the mortgage than the house is currently worth. Some have missed one or more mortgage payments, and foreclosure is closing in on them.

“Let me say first that my goal is to keep people from getting into a situation where they can't pay their monthly mortgage,” he said. “That would involve budgeting, an emergency fund, and basic financial savvy. But if you are in trouble, you need to take action and take action now.”

HUD, the federal Housing and Urban Development agency, has $1 billion to implement what is called the Emergency Homeowners' Loan Program. If you are eligible, you must first complete a pre-application screening worksheet by July 22, 2011.

Eligibility includes a drop in income resulting from adverse economic conditions or a medical emergency. You must be three months delinquent on your residential mortgage, under foreclosure notification, and there must be a reasonable likelihood that you can resume your mortgage payments.

If you qualify and are selected through a random process, you will receive loans (which do not have to be paid back) for overdue payments and future monthly payments.

Stanley said there's also been some help from the lender side. Several banks have modified loan terms for "option ARM" loans that had low initial payments and teaser interest rates.

“Probably because these mortgage loans should not have been issued in the first place, the banks are doing this without even being asked,” he said. “One bank is using every technique short of principal reduction to remake the loans -- waiving prepayment penalties, refinancing, lowering the interest rate, postponing some of the balance and extending the term.

“Be careful though, and don't get caught up in any scams where large upfront fees are charged,” Stanley said.

The critical thing if you can't pay your mortgage is to do something right away – don't put it off.

Stanley said the first step is to contact your mortgage lender. If that doesn't work, try reaching out the United Way's 211 help line.

Bill Stanley and Money Matters airs every Tuesday on FOX21 Morning News.
If you have a question for Bill, contact him directly: moneycoachbill@aol.com