The Importance of a Foreclosure Prevention Plan
If you are reading this it is likely that you may be, or fear you may soon be late opn your mortgage. If so, we recommend you create a Foreclosure Prevention plan. This way you will be ready to talk with your lender and have facts available and not emotion. Emotion and excuses (if any) will not sway a lender.
- Most lenders have Loss Mitigation Departments trained to take your calls
- They work for the Lender and not you.
- Their employees may appreciate someone organized and cooperative
- Your calls will be recorded so be consistent both in acts and attitude
- Time is your enemy. Based on time, their cooperation may be limited
- Have your financials ready, complete, and verifiable
- Have all documentation ready
- Make sure they also explain why you are behind
- Make sure your issue has been resolved if possible
- Your information and financials will determine whether they can / will help you
Foreclosure Prevention and Your Lender
- The person on the phone has to work with people often upset. Don’t be
- Consider that they will have good and bad days too
- Be polite and patient
- Be FACTUAL and honest with your information.
- NO excuses. Lenders have heard every excuse possible
- YOU need the Lender’s cooperation. Not vice-versa
- Lenders will tell you how much it will take to make you current
- Lenders will ask if you can make the loan up to date today
- Lenders may offer a repayment plan for the current shortage
- Lenders decisions take TIME
- Lender decisions require approval which takes even more time
- Lenders MAY suggest a a re-payment plan
- ALL agreements between you and them will need the approval of someone else
- Any chnages or agreements will be hndled as a legally binding contract
- NO contract is legal until both parties have signed the agreement (IMPORTANT)
Your Foreclosure Prevention Plan Will Help
- Your Plan will allow you to have clear, concise, and organized answers
- Your Plan will allow you to BRIEFLY explain why you are in default
- Your Plan makes you ready to provide documentation explaining why you went into default
- Your Plan will allow your Lender to determine if your issue(s) have been resolved
SUGGESTIONS
- Document current amount to end default
- Document repayment plan proposal
- Document the dates their plans and figures are good through
- Document every person, phone, email, mail, fax, and department contact info
- All of this may also be mailed /emailed to you
- To begin to set up this plan, go to the Real Estate tab and go to Save or Sell
LENDER PROGRAMS
Loan Modification
- A Loan Modification is generally a temporary change in your mortgage rate and payment
- Typical modifications are temporary to see if you can honor the terms of the new agreement
- If possible – TAKE this if you can afford it
At the end of that term the Lender will then evaluate your financials and payment history
Forbearance
- A lender may decide to put any outstanding amounts owed to the end of the loan
- This will extend the length of your loan unless you pay it back early
- All amounts will have to be paid off
- Amounts put in forbearance could include interest, penalties, and fees
Refinance
- A Lender could offer lower interest rate of the loan temporarily/permanently
- A Lender could offer to extend the time of the loan permantly
- A Lender could do any of the above
- Choices my vary depending on the circumstances and may be based on your written plan
Internal
- A Lender could have other programs available so make sure to ask!