How to Talk to Your Lender

Anna Makowiak with Home Defense Fund of Atlanta Legal Aid had some tips on how to talk with your lender and not get hoodwinked during the home loan modifications!

Tips:

Be proactive- Do not wait to be facing foreclosure to start working with the lender. Contact your lender as soon as you know you might not be able to pay your mortgage or if your income has decreased and you anticipate not being able to make your mortgage payments- ask to be considered for loss mitigation options (most programs/lenders can offer you a forbearance for a period of 3 months for example), contact a HUD certified (FREE!) housing counselor to work with you and the lender and help facilitate the process.

Maintain good records- Communicate with your lender in writing as much as possible, keep dated copies of ALL communication to and from your lender, open and read all mail from your lender, don't procrastinate, send documents by fax AND mail and keep a copy for your records as well as a copy of the fax transmission success coversheets. Paperwork gets lost all the time- very important to show that you were providing the information requested within the timeframe required by the lender. You will most likely be asked to send in the same information more than once. Follow up with lender regularly.

Provide accurate income information- you will be required to verify your income so deposit any income into a bank account for easy verification. If your income changes for any reason, let the lender know that immediately.

Know the difference between gross and net income.

Write down how much you pay monthly for each of your bills and how much you spend for other monthly expenses, such as groceries, gas for the car, parking, yard maintenance, clothes, and school expenses. Look at your bank statement to make sure that you haven't forgotten anything. This will help you to fill out any financial form from your lender. Make sure that any financial form you send back to your lender accurately reflects your income and your expenses.

If you obtain a trial modification- make all payments on time by certified check and keep copies for your records. Follow up regularly with lender after last trial mod payment is made to find out when mod will be made permanent.

Don't assume a foreclosure has been stopped because you are currently working with the lender to obtain a modification. If in foreclosure, contact the foreclosing attorney to obtain written confirmation that sale has been stopped.

Do not fall prey to scammers - do not pay individuals who promise you they will be able to stop a foreclosure. HUD housing counselors offer their services for free.

Have a backup plan if a foreclosure is scheduled - bankruptcy, being ready to move out, etc.

Inform yourself - resources are available on the internet http://makinghomeaffordable.gov/ , or call Atlanta Legal Aid home defense program at 404-377-0701.