The single biggest mistake borrowers make when they fall behind on their mortgage is not contacting their lender. As soon as you realize you have a problem, you've got to make that call. "The sooner the lender is approached, the better," recently said a spokesperson for Washington Mutual. "Even after one receives a default notice, one should contact the lender and open up discussions."
The foreclosure process for most lenders have set time line or schedule, so the longer you wait the fewer options you'll have.
1. Understand the Foreclosure Prevention techniques
2. Ask to speak to the Loss Mitigation Department
3. Be prepared to review your prepared Balance Sheet with the lender
4. Create your a mortgage lender correspondence log, to track your lender conversations
5. When speaking to the lender, ask about all of your options and document everything
6. If you don't get all the answers you need, or the information seems incomplete, call the lender back, you will get another representative on the phone. Sometimes the representative you are speaking to is new, having a bad day...or just not knowledgeable.
7. Follow up regularly with your lender. Don't wait until the lender calls you...call them once a week...after all, it's your house you are trying to save.
8. Open all of your mail, return all of the lenders calls.
Finally, be ready to wait on hold for a long period of time. Its not a good idea to call on your cell phone to rap up your minutes, charge your phone in advance and be ready to hang on the line for a long period of time.
Tuesday, July 29, 2008
Save Your Credit and Avoid Foreclosure
Lenders don´t want to foreclose. If you can´t make your mortgage payments, even if you owe more than your house is worth, they´re often willing to work with you. When you call the lender, ask to speak to the "loss mitigation" department.
Calm your nerves and read the following tips before calling:
1. See if your monthly statement contains the phone number to the lender's loss mitigation department. If not, call the customer service number and ask for that department. At most lenders, the loss mitigation department helps borrowers determine which workout option they qualify for. Some lenders have their collections departments advise borrowers on workout options, borrowers may be sent to their collections department.
2. Be ready to wait on hold for a long period of time. Its not a good idea to call on your cell phone to rap up your minutes, charge your phone in advance and be ready to hang on the line for a long period of time.
3. Some representatives in the loss mitigation department are cranky, mean, over worked and not trained. If you are being treated badly or if the information that you are being told doesn't sound or seem correct, remain calm and polite, get as much information as possible, hang up...and then call back.
4. Share all details about your financial situation with your lender.
Your lender will ask a series of questions to assess your financial situation. Some lenders, like Wells Fargo Home Mortgage, have specialists with both the training and technology to pre-qualify a caller for a workout option right over the phone. Other lenders do not have this technology and will send you a "work out package" to complete and send back to them.
By preparing yourself in advance, and having the financial documents including income and expense numbers in front of you when you make the call, you might be able to get a resolution within minutes. The lender will probably ask you to fill out similar documents that describe your financial situation. They will review and analyze the documents before offering a solution to bring your loan up-to-date. So organize your bills, statements, and anything else that will help give an accurate picture of your current financial status.
- An explanation of your current financial circumstances.
- Details about your current income, including pay stubs, statements regarding unemployment, disability, social security, retirement, pubic aid, or and other similar documentation.
- A list of your household expenses.
- An explanation of what occurred to put you in this financial circumstance. Otherwise referred to, as your hardship.
Calm your nerves and read the following tips before calling:
1. See if your monthly statement contains the phone number to the lender's loss mitigation department. If not, call the customer service number and ask for that department. At most lenders, the loss mitigation department helps borrowers determine which workout option they qualify for. Some lenders have their collections departments advise borrowers on workout options, borrowers may be sent to their collections department.
2. Be ready to wait on hold for a long period of time. Its not a good idea to call on your cell phone to rap up your minutes, charge your phone in advance and be ready to hang on the line for a long period of time.
3. Some representatives in the loss mitigation department are cranky, mean, over worked and not trained. If you are being treated badly or if the information that you are being told doesn't sound or seem correct, remain calm and polite, get as much information as possible, hang up...and then call back.
4. Share all details about your financial situation with your lender.
Your lender will ask a series of questions to assess your financial situation. Some lenders, like Wells Fargo Home Mortgage, have specialists with both the training and technology to pre-qualify a caller for a workout option right over the phone. Other lenders do not have this technology and will send you a "work out package" to complete and send back to them.
By preparing yourself in advance, and having the financial documents including income and expense numbers in front of you when you make the call, you might be able to get a resolution within minutes. The lender will probably ask you to fill out similar documents that describe your financial situation. They will review and analyze the documents before offering a solution to bring your loan up-to-date. So organize your bills, statements, and anything else that will help give an accurate picture of your current financial status.
- An explanation of your current financial circumstances.
- Details about your current income, including pay stubs, statements regarding unemployment, disability, social security, retirement, pubic aid, or and other similar documentation.
- A list of your household expenses.
- An explanation of what occurred to put you in this financial circumstance. Otherwise referred to, as your hardship.
Tuesday, July 22, 2008
Hardship Letters - A Key to a Successful Loan Modification
The following are the lenders qualifications to modify your loan. Most borrowers will meet these requirements. Keep them in your mind, when speaking to the lender.
o Commitment to the Lender
o Commitment to the house
o Ability to pay (the most important requirement)
A great hardship letter must be included in your loan modification package to the lender, before the lender will even consider stopping your foreclosure. The hardship letter must include the loan number, primary cause of default and a detailed summary of what caused the hardship that allowed you to become defaulted in your mortgage, and your current ability to pay the mortgage.
An example of all of the elements needed in a compelling Hardship letter includes:
Loan No. _______________
[ ] Death/Illness of Mortgagor [ ] Death in Family [ ] Marital Difficulties [ ] Property Problems [ ] Reduction of Income [ ] Excessive Obligations [ ] Employment Transfer [ ] Unemployment [ ] Inability to Rent [ ] Inability to Sell [ ] Military Service [ ] Business Failure [ ] Reduction of Income [ ] Fraud [ ] Payment Adjustment [ ] Payment Dispute [ ] Other ________________________________________________
Please take a few minutes to briefly state below what hardship or difficulties have occurred that caused you to default on your mortgage. If a series of events brought about this financial crisis then begin with the first event and explain how this series of events combined to create the default. Be aware that without fully understanding your hardship, the lender may not be able to help you.
Where possible, please provide support for the hardship (i.e., unemployment paperwork, separation agreement). Should you need more space to write, please attach additional pages. It is important that this letter convey what caused you to fall behind on your mortgage payments.
K. Patrice Williams has a BA in Economics as well as a law degree. Patrice has researched and personally implemented almost all of the pre-foreclosure techniques detailed in the book: "6 Simple Steps to Avoid Foreclosure". http://www.avoidforeclosuremanual.com
o Commitment to the Lender
o Commitment to the house
o Ability to pay (the most important requirement)
A great hardship letter must be included in your loan modification package to the lender, before the lender will even consider stopping your foreclosure. The hardship letter must include the loan number, primary cause of default and a detailed summary of what caused the hardship that allowed you to become defaulted in your mortgage, and your current ability to pay the mortgage.
An example of all of the elements needed in a compelling Hardship letter includes:
Loan No. _______________
HARDSHIP LETTER:
What is the primary cause of your default? (Check all of those that apply)[ ] Death/Illness of Mortgagor [ ] Death in Family [ ] Marital Difficulties [ ] Property Problems [ ] Reduction of Income [ ] Excessive Obligations [ ] Employment Transfer [ ] Unemployment [ ] Inability to Rent [ ] Inability to Sell [ ] Military Service [ ] Business Failure [ ] Reduction of Income [ ] Fraud [ ] Payment Adjustment [ ] Payment Dispute [ ] Other ________________________________________________
Please take a few minutes to briefly state below what hardship or difficulties have occurred that caused you to default on your mortgage. If a series of events brought about this financial crisis then begin with the first event and explain how this series of events combined to create the default. Be aware that without fully understanding your hardship, the lender may not be able to help you.
Where possible, please provide support for the hardship (i.e., unemployment paperwork, separation agreement). Should you need more space to write, please attach additional pages. It is important that this letter convey what caused you to fall behind on your mortgage payments.
K. Patrice Williams has a BA in Economics as well as a law degree. Patrice has researched and personally implemented almost all of the pre-foreclosure techniques detailed in the book: "6 Simple Steps to Avoid Foreclosure". http://www.avoidforeclosuremanual.com
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