Money troubles can be embarrassing. Some people take it as a sign of weakness, and many people don’t like to admit that they need help. This is the main reason that people avoid contacting their mortgage lenders when they have cash flow problems that affect their ability to remain current on their mortgage payments. This reasoning, however, can have devastating legal consequences. As counterintuitive as it may sound, the onset of a financial hardship is precisely the time that you need to reach out and talk to your lender.
If you are having trouble finding your lender, look in the following places for their contact information:
• The billing statement you receive each month;
• Your payment coupon book; or
• Conduct a search on the Internet—many lenders have websites that are specifically for borrowers experiencing financial distress.
Prior to contacting your lender, make sure that you have all of the important information readily accessible for your reference during the call. This information includes:
• Most recent monthly mortgage statement;
• Pay stubs or other documents showing your household income;
• A copy of your most recent tax return;
• Any second loan or home equity line of credit statements;
• Account balances and minimum monthly payments required on all credit cards;
• Your most recent checking, savings, and investment statements; and
• The basis for your financial hardship and all supporting proof.
Most lenders require the borrower to fill out a loan workout package. This loan workout package should be completed and returned to your lender quickly. This will help you to be considered for assistance. The completed package will be examined by the lender before they speak to you about a solution, and in some instances the lender can’t proceed to the next step of this process without the completed and signed documents.
You might also need to provide updated documents to your lender as the workout process continues. It is vitally important that you provide these documents and any other information that your lender requests as soon as possible. In my experience, the Number One reason that borrowers don’t receive the workout assistance that they need is simply because they fail to provide the necessary documents.
This is not a quick process. You should be ready to have several conversations with your lender, and the sooner you act, the better. Seeking mortgage assistance from your lender works best when you are only a few payments behind on your mortgage—the further behind you are on your payments, the fewer options are available. If you need help, ask for it today.
Here are some suggested questions to ask your lender:
• How much time do you allow to complete a workout?
• What are your obligations under the workout package?
• What are the specific due dates and deadlines?
• Will a foreclosure sale of your property be put on hold while your lender considers a workout package?
Make sure to keep a record of all of your contacts with you lender for future reference. Also, don’t give up if you are not successful in reaching your lender right away. You have to be persistent, because your mortgage problem will not go away by itself. Don’t expect your lender to do everything for you. In fact, I often suggest that borrowers set aside a specific time each week to call their lenders and ask the following questions:
• What is the status of my workout package?
• Do you have all of the documents that you need?
• Do any of my documents need to be updated?
It will take time and effort to get your mortgage back on track, and you have to take an active role in the process. Don’t give your lender the brush-off. Make sure that you are doing everything that you can to keep your home and straighten out your financial situation.
The law firm of BoltNagi PC is a full service business law firm located in St. Thomas, U.S. Virgin Islands representing both local and national mortgage lenders.