How to Keep Your Home

The best advice you'll 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 holder immediately and ask them for help.
• Contact a certified counseling agency.
• Know what kind of gap you need to manage 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, cableTV or a second car.
• Take stock of your assets like jewlery, investments, or whole life insurance that may help bring you up to date on your mortgage payment.
• Do not sign over anything unless you have a reputable 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 the problem eventually.
• If you feel that keeping your home is not an option, contact the company that services your mortgage, which is the name on the statement that you write your mortgage payment to, and ask for a person that can help you explore options to minimize your loss.

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.

A workout package from the lender will require the following list of documents:

• Completed Application Form
• Pay stubs of Income Verification
• W-2 Forms from the Previous Year
• Completed Budget
• Hardship Letter Explainign your Situation

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 thru a solution.

Unresponsive and unhelpful servicers are out there, regardless of the incentives provided by mortgage insurers or investors. When a servicer/lemder does not respond to a workout 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 the original mortgage documents, a charge for the mortgage insurance and who it is paid to should be on the settlement statement. If you have a private mortgage insurance (PMI), you may be entitled to a partial claim. Make sure you know who your insurance provider is.

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.

Helpful Phone Numbers

• FHA Home Office: 888-297-8685
• Fannie Mae Home Office: (202) 752-7000
• Fannie Regional Offices: Midwestern (313) 368-6200 (Contact the one where the servicer you're working with is located): IL, IN, IA, MI, NE, ND, OH, SD, WI
• Rural Developement: (800) 793-8861
• Veterans Administration Central Office: (800) 827-1000
• Mortgage Guaranty Insurance Corporation (MGIC): (800) 272-4071

 

taken from www.michigan.gov