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How To Keep Your Home - The best advice you will ever hear when you know that you are having financial trouble is COMMUNICATE, COMMUNICATE, and COMMUNICATE! |
- Open and respond to notices in the mail.
- Contact your mortgage lender immediately and ask them for help.
- Contact a certified counseling agency or call 211
(if available in your area).
- Know what kind of monthly shortfall you have by making a list of your monthly spending and comparing it to your monthly income.
- Reduce your spending by eliminating a monthly payment like a cell phone, cable TV or a second car.
- Take stock of your assets like jewelry, investments, or whole life insurance that if sold, may help bring you up to date on your mortgage payment.
- Do not sign over anything unless you have a reputable attorney or homeownership counselor review it.
- If you find you are 30 days past due, your lender will expect the past payment along with the current payment, late fee and interest. Do not spend money that you have allocated for the mortgage on other things. You will need this money to work yourself out of the problem eventually.
- If you feel that keeping your home is not an option, contact your mortgage lender or servicer (which is the name on the statement that you write your mortgage payment to) and ask for a person that can help you explore your options to minimize your loss.
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| THE WORKOUT PROCESS - LOSS MITIGATION |
It’s common practice to begin the workout process with the servicer, asking specifically for the loss mitigation department (if one exists). Always keep track of the time, date and person you talked to. Confirm all agreements in writing. |
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A workout package from the lender will require the following documents: |
- Completed application form
- Pay stubs for income verification
- W-2 forms from the previous year
- Completed budget
- Hardship letter explaining situation
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| It may take a loss mitigation specialist (your lender) a few weeks or even months to report back to you with the decision about the workout plan. It’s important to regularly check with them about the status so that the request doesn't get lost in the meantime. Also note that the collection department may still be “attempting to collect a debt,” so you should be aware that the phone calls won’t stop when the loss mitigation department is working on a solution. |
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| Unresponsive and unhelpful servicers are out there, regardless of the incentives provided by mortgage insurers or investors. When a servicer/lender does not respond to a work-out proposal it is appropriate to contact the owner of the risk. Exactly who this is can be difficult to figure out. You can look at original mortgage documents - a charge for mortgage insurance and who it is paid to should be on the settlement statement. If you have private mortgage insurance (PMI), you may be entitled to a partial claim. Make sure you know who your insurance provider is. |
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| Under the 1995 amendment to the Truth in Lending Act the servicer is required, upon written request, to provide you with the name, address and telephone number of the mortgage holder. |
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| HELPFUL PHONE NUMBERS |
- Federal Housing Administration (FHA) Home Office: 1-888-297-8685
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- Federal National Mortgage Association (Fannie Mae) Home Office: (202)752-7000
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- Federal National Mortgage Association (Fannie Mae) Regional Offices: Midwestern (312) 368-6200 (Contact the one where the servicer you’re working with is located): IL, IN, IA, MI, MN, NE, ND, OH, SD, WI
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- Rural Development: 1-800-793-8861
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- Veterans Administration Central Office: 1-800-827-1000
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- Mortgage Guaranty Insurance Corporation (MGIC): 1-800-272-4071
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