• Tue. Oct 3rd, 2023

UGANDA, Kampala | Real Muloodi News | Lockdowns, curfews, and interruptions to the worldwide supply chain caused by COVID-19 drained cash and brought down businesses, big and small.

Ugandans are now grappling with soring double-digit inflation exacerbated by the Russia-Ukraine conflict driving up oil and gas prices, which has sent global production and supply chains into further turmoil, coupled with extended drought in some regions of the country, and depreciation pressures on the Uganda Shilling.

As the spillover effects of the global economic decline filter through the domestic economy, many Ugandans are struggling to stay afloat.

As a consequence, the number of properties advertised for auction over defaulting on mortgage payments has doubled in the first half of this year, 2022.

On top of all this, Ugandans are now faced with the impending threat of more lockdowns due to the Ebola epidemic that has recently hit some districts in the country. Many are teetering on the edge of defaulting on mortgage payments.

For instance, Ms Joyce Namuddu took a loan in 2019 but she was among the lucky ones when a family member stepped in to prevent the sale of her rental properties when she was unable to repay.

For Masaka resident and former textile merchant Mr Ismail Ssempijja, whose residence and rental properties are going to be put up for auction, the situation is different. He is unable to see a way out of the predicament.

Mr Ssempijja says, “my family house and some of my rental houses were advertised…I have not been able to save them, I am stranded”.

“I do not know what is going to happen, it is God to decide because the situation is too tough on my side,” he adds.

Early in 2020, Mr Ssempijja applied for a loan with a two-year repayment period to develop his business. His livelihood was ruined when the country was placed under lockdown a few months after he received the loan to stop the Coronavirus from spreading.

“My businesses collapsed. There is no money. I am engaging the bank, but all they want is the money. I would have paid if Covid had not disrupted us, this was not the first time I acquired a loan. I have always paid back promptly,” he says.

Here are some things you can do if you are struggling to make your mortgage payments, or are concerned about missing one.

Apply for Mortgage Loan Modifications

Changes to your loan terms and conditions are known as mortgage loan modifications. This kind of loss mitigation can lower your monthly payment to a level you can manage.

Modifications may include increasing the time to repay the loan, lowering your interest rate, and/or forbearing or lowering your principal sum.

Make sure you understand how your monthly payments will alter if you accept a loan modification offer, as well as the total amount you will owe over the short- and long term.

Think carefully about what form of alteration will best meet your needs. You risk losing your house if you obtain a loan modification but are still unable to make your payments.


Your mortgage payments could become more manageable if you refinance with a new mortgage that has a reduced monthly payment amount.

Weeks or even months may pass throughout the refinancing procedure, and you will probably have to pay (or finance) origination costs for the new loan. However, your chances of being approved for a new mortgage may suffer if you have previously missed payments on your present loan.

Create a Payback Strategy

Your lender or servicer may let you set up a repayment plan if you are having problems paying your mortgage.

A payback schedule is a planned approach to offset the loss by making up for missing mortgage loan payments over a certain time.

Make sure this is the best choice for you. Ensure you understand the terms of the repayment plan before signing it, and consider if you can afford the increased instalments.

Renting Out Your Property

As long as you can collect enough rent to meet your mortgage payments, renting out your property might be a viable choice if you can move in with friends or relatives for little or no expense.

Keep the following in consideration before becoming a landlord:

  • While setting up the rental, you will need to make arrangements to make up any missed mortgage payments.
  • Home upkeep and repairs will still fall under your financial responsibility.
Sell Your House Quickly

Selling your house for less than what is owed on the mortgage is known as a short sale.

The alternative to foreclosure is a short sale, however since it is a sale, you will have to vacate your house.

Even if the sale price or profits wind up being less than the outstanding balance on your mortgage, you might be able to sell your property to pay off your mortgage if your lender or servicer agrees to a short sale.

Before you proceed with a short sale, you should ask your lender to forgive any deficit, which is the shortfall between the value of your property and the remaining balance of your mortgage loan.

Your lender may file a lawsuit against you to recoup the deficit after a short sale. Receiving a waiver of deficiency entails the lender waiving their ability to pursue this debt. Obtain the waiver in writing and save it for your records if the lender decides to waive the shortfall.

Using a “Deed-in-Lieu of Foreclosure,” Give Your Home to the Lender

In a deed-in-lieu of foreclosure, you voluntarily hand up control of your house to the lender to stop the foreclosure process.

You might be able to avoid being held personally responsible for any balance on the mortgage with the use of a deed-in-lieu of foreclosure.

When considering a deed-in-lieu of foreclosure, borrowers can also inquire with their lenders or servicers about possible assistance with their moving costs through private initiatives known as “cash-for-keys” schemes.

You should ask your lender to waive any deficiency if you are accountable for it. Obtain the waiver in writing and save it for your records if the lender decides to waive the shortfall.

Get Forbearance

You can ask your lender for mortgage forbearance if you are temporarily unable to make your mortgage payments due to financial difficulty. This can lower or even halt your mortgage payments for up to a year until you can resume them.

If you are given forbearance, the lender will agree not to foreclose on your home during that time. Keep in mind that you will be required to make up for any missed (or late) payments, generally in a flat amount or through a repayment plan.

Summing Up

Both struggling to pay your mortgage or any other expense and the solutions mentioned above are never enjoyable. Some could make you give up your house, while others might damage your credit, and a few might even do both.

But when you are in survival mode, your best course of action may be to attempt to minimise the harm and choose the course of action that puts you in the best possible position to start over.

Taking immediate action and being proactive can prevent bankruptcy or foreclosure and help you get closer to getting back on your feet, whether it is in your present house or one that is waiting for you in the future, regardless of how severe your financial situation may be.


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