How to Contact Your Lender

Many people avoid calling lenders about money troubles because they:

• Feel embarrassed discussing money problems with others
• Believe that if lenders know we are in trouble, they will automatically rush to a collection agency or foreclosure (seize property for failure to pay a mortgage debt)

But lenders want to help borrowers keep their homes because:

• Foreclosure is expensive for lenders, mortgage insurers and investors
• HUD and private mortgage insurance companies and investors like Freddie Mac and Fannie Mae require lenders to work aggressively to help borrowers facing money problems

Lenders have workout options (choices) to help you and:

• These options work best when your loan is only one or two payments behind
• The farther behind you are on your payments, the fewer options are available

Don’t assume that your problems will quickly correct themselves!  Don’t lose valuable time being overly optimistic!

If you are having trouble making your payments, contact your lender to discuss your options as early as you can. Most lenders are willing to work with customers they believe are acting in good faith, and those who call them early on.  Look forward to your lender being willing to explore many possible solutions, without guaranteeing any one particular solution.

Don’t ignore mail from your lender! If you don’t get in touch with your lender, your lender will try to contact you by mail and phone soon after you stop making payments. It is very important that you respond to mail and phone calls offering help.

If your lender doesn’t hear from you, they will have to start legal action leading to foreclosure. This will greatly increase the cost to bring your loan current.  Thus, the longer you wait to call, the fewer options you will have.

Before you have any conversation with your lender, PREPARE!

Find your lender by looking at:

• Your monthly mortgage billing statement
• Your payment coupon book
• The Lender Loss Mitigation Contact Directory included with “The Foreclosure Companion”

You should have the following information ready when you call:

• Your loan account number
• Pay stubs
• Benefit statements from Social Security, disability, unemployment, retirement, or public assistance
• Tax returns or a year-to-date profit and loss statement, if self-employed
• A list of household expenses
• Calculate the equity in your home = estimated market value less the balance of your first and any second mortgage or home equity loan.
• Provide a brief explanation of your circumstances by writing the answers to the following questions:

• What happened to make you miss your mortgage payment(s)? Do you have any documents to back up your explanation for falling behind? How have you tried to resolve the problem?
• Is your problem temporary, long-term, or permanent? What changes in your situation do you see in the short term, and in the long term? What other financial issues may be stopping you from getting back on track with your mortgage?
• What would you like to see happen? Do you want to keep the home? What type of payment arrangement would be feasible for you?

Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a “loan workout” package. This package contains information, forms and instructions. If you want to be considered for assistance you must complete the forms fully and truthfully and return them to your lender quickly. Your lender will review the complete package before talking about a solution with you.

Throughout the foreclosure prevention process:

• Keep notes of all your communications with the lender, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax, or postal mail), the name of the representative, and the outcome.
• Follow up any oral requests you make with a letter to the lender. Send your letter by certified mail, “return receipt requested,” so you can document what the lender received. Keep copies of your letter and any enclosures.
• Meet all deadlines the lender gives you.
• Stay in your home during the process, since you may not qualify for certain types of assistance if you move out. Renting your home will change it from a primary residence to an investment property. Most likely, it will disqualify you for any additional “workout” assistance from the lender. If you choose this route, be sure the rental income is enough to help you get and keep your loan current.