Managing your Mortgage - How to Work with your Lender

Starting off, you do want to contact your lender if you are having problems paying your mortgage, however, I would strongly recommend dealing with the problems you *may* be facing with your mortgage *prior* to any major problems if at all possible. Please be advised, if you're getting phone calls from your lender you are probably talking to the Tier 1 collections person. Their job: to get the money. This is fine. Just be aware, that depending on your situation you may need the next level up. Most important: Pay Something. Don't get too far behind. You'll be in a much better place to negotiate if you can pay something and down the road have to 'settle on the balance' Do not ignore the phones calls and do your best to talk with them.
Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems. In fact, in my case I have found the lender to be 'my friend' which simply means they are willing to work with you reasonably. Keep earning money and keep paying down the balance.
Lenders have workout options to help you keep your home. However, 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. Again, you may 'short pay' the loan, simply pay less but not much less. Be late or split the payment up
Do understand that the income you have is your best defense as well as your creative ability to earn more money. Regardless of your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option. Nonetheless, keep working with the lender, paying what you can, even write a letter (very brief however) telling them you are not able to pay the full amount and so forth.
There are sites such as: www.DebtFreedomSolution.com and www.HowtoCleanUpYourCredit.net that have resources, service providers and information to help you in finding the best optimal arrangements to manage your situation of Debt and your Mortgage.
The US Housing Department offers these tips and guides:
Finding Your Lender
Check the following sources for lender contact information:
- Your monthly mortgage billing statement
- Your payment coupon book
- Search the web
- Directory assistance or phone book.
Information To Have Ready When You Call:
To help you, lenders typically need:
- Your loan account number
- A brief explanation of your circumstances
- Recent income documents such as pay stubs, Social Security benefits statements, disability, unemployment, retirement, or public assistance. If you are self-employed, have your tax returns or a year-to-date profit and loss statement from your business available for reference)
- List of household expenses
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 and return them to your lender quickly. The completed package will be reviewed before the lender talks about a solution with you.
Important! Do Not Ignore Mail or Phone Calls From Your Lender
Even though you may be talking to a 'Tier 1' agent 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 the mail and the phone calls offering help. If your lender does not hear from you they will be required to start legal action leading to foreclosure. This will substantially increase the cost of bringing your loan current. Do not ignore contact from your lender.
If You Have an FHA Insured Loan
HUD's National Servicing Center works closely with customers who have FHA insured loans. Check your mortgage document or ask your lender if your loan is FHA insured. Do you feel your lender is not responding to your questions? Do you want assistance contacting your lender? HUD's National Servicing Center is ready to help you.
So with that I wish you the best of luck, just remember, when times are tight it imperative to relax, think creatively, plan on working harder and longer and communicate with your creditors so they know you are indeed working on your debt and income issues.

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