MORTGAGE FORCLOSURE

CONTACT YOUR LENDER OR LOAN SERVICER IMMEDIATELY! It is crucial that you contact your lender or loan servicer as soon as you realize that you are unable to make a payment. This is a crucial first step in addressing your situation and identifying possible solutions. It is very important that you respond to mail and phone calls from your lender. If your lender does not hear from you, they are more likely to start legal action leading to foreclosure. Try to get a live person and a direct number. Look at your last mortgage statement to find out if your mortgage is self-servicing or contracted out to a servicer. The workout department and/or the servicer have the decision-making authority in any workout and some lenders and servicers may be subject to restrictions on how or what kind of workout they may enter into. Unfortunately, in this economy, the workout departments for lenders and servicers are short staffed. Most times it can be at least 90 days for any decision to be made and some workout departments will not even consider your calls unless you're in arrears, sometimes as much as two months. If you are considering a workout, it takes time. And the decision may not be in your favor.

A WORD OF CAUTION ON THE MORTGAGE MODIFICATION COMPANIES

At the heart of the President Barack Obama's ambitious plan to rescue the housing market is the conviction that restructuring distressed mortgages will keep struggling borrowers in their homes and help insert a floor beneath plummeting property values. Whether you call it a loan modification, mortgage modification, restructuring, or workout plan, it’s when a borrower — who is facing great financial hardship and is having difficulty making their mortgage payments — works with their lender to change the terms of their mortgage loan. The workout plan could result in temporary or permanent changes to the mortgage rate, term and/or monthly payment of the loan as the plan’s goal is to help the borrower reduce their monthly mortgage payments. One word of caution: this new bill has spawned a whole new wave of loan modification salespeople who might be perfectly fine and those who are not. Be careful. Also, it’s always good to hire legal counsel. Get a referral from your local bar association. Because when dealing with anyone who specializes in this field, it may be best to deal with someone who is local in the event any problems arise - it is easier to speak to someone who has an office a mile away from you than someone who has an office at the other end of the country.