by Monica Steinisch
To ensure your conversation with the lender representative is as productive as possible, prepare for the call by answering these questions:
Harper also advises going into the call knowing how much equity you have in the home and what your monthly income and expenses are. The lender will need your financial information to devise a realistic solution.
During this process, keep a log of all communications. Follow up any requests you make by phone with a letter, and make sure all agreements are put in writing. And stay in the property, since you may not qualify for certain types of assistance if you move out.
Legitimate, reputable lenders--as opposed to predatory lenders, who are intentionally deceptive or discriminatory--want to avoid foreclosures, which are both costly and time-consuming. Many, if not most, have special programs that provide options to financially strapped customers.
Freddie Mac makes a variety of workout options available to its borrowers, including:
What are the odds of your successfully avoiding foreclosure with one of these workouts? That, of course, will depend on your situation. However, a 2004 Freddie Mac study concluded that repayment plans could lower the probability of home loss by 80% among all borrowers.
Not every lender offers all these options. Some, such as the Federal Housing Administration (FHA) and Veterans Administration (VA), offer different or additional ones. You and the representative you speak with will determine which, if any, of the lender's programs will get you back on track.