1. Be an active participant.  Its your loan. You will be held accountable in the final analysis.

2. Take an honest appraisal of your financial situation. Contact me via e-mail if you need a financial worksheet (e-mail jtaylor@harderandsmarter.com and put 'financial worksheet' in subject line).  The bank is going to want to know if they can recover the money they have lent you.  Be prepared to discuss: how far behind am I? am I currently employed? is it likely that I’ll have the resources (either from myself or friends and family) to bring my loan current?

3. Open your mail, especially if it comes from your bank.  Answer calls from them.  You probably feel embarrassed, but you shouldn’t be.

4. Keep records – not just of letters, but of every conversation.  Ask names and record them, along with the date and a record of what was discussed.

5. Call your bank.  Ask to speak with someone in loss mitigation.  Other names for this department might be asset recovery, workouts, or home preservation.   Be persistent.

6. Know the lingo.  The common types of loan workout programs that will probably be discussed are:

• A reinstatement plan you agree with the lender to bring your loan current with a lump sum.  If your mortgage is insured you may qualify for an interest-free loan from the guarantor to use.

• A forbearance plan the lender agrees to suspend or reduce payments for a short period of time as long as there is another option to bring your loan current.  It may be a reinstatement, or they may want you to increase your payments until the deficiency is paid off (A REPAYMENT PLAN).

• A loan modification changes the terms of your loan, either your interest rate, the principal owed, or the length of the loan.  Remember you must qualify for these plans, and usually income and credit are key factors.  95% of people who are at least 60-days behind won’t.

7.  If bankruptcy is an option get a lawyer.

Have additional questions?  Need more information?  Contact me anytime - I'll be happy to help!

Information deemed accurate but not guaranteed. HarderAndSmarter Realty is not engaged in the practice of law nor does it give legal advice.