Bankrate asked 10 top lenders -- Bank of America, Chase, Citigroup, Countrywide, IndyMac, National City, Residential Capital (GMAC), Wachovia, WaMu and Wells Fargo -- to outline their procedures for helping struggling borrowers save their homes.
What is the first thing borrowers should do if they are at risk of missing a payment?
Call a National City Mortgage customer counseling representatives at (800) 523-8654 between the following times:
- 8 a.m. - 10:30 p.m. ET, Monday - Thursday.
- 8 a.m. - 5 p.m. ET, Friday.
- 8 a.m. - Noon ET, Saturday.
When should they call you -- before they're late with their first payment, or some time later on (e.g., 60 to 90 days after missing the first payment)?
Homeowners should not delay in contacting us if they believe they are going to be late with their payment.
Who should they ask to speak to?
We have hardship assistance representatives who work with borrowers to determine their best option. Our representatives are highly trained and familiar with a wide variety of intervention and resolution methods.
What information should they have available when they call?
- Letter describing your current situation and how you would like it resolved.
- If your home is listed for sale, a copy of the listing agreement.
- Copy of your most recent pay stub from each income source, or other income verification.
- Financial statement form documenting all assets and liabilities (debts) plus monthly income and expenses.
You can download a copy of a financial statement and find other instructions for sending your information to National City by visiting our Web site.
What types of solutions might be available to them? Please be as specific as possible about the range of options available.
Several options are available for National City customers worried about losing their homes to foreclosure. These options include:
- Forbearance: If you know you will have a source of funds to bring the account current by a certain date, you may be eligible to arrange for a temporary reduction or suspension of payments for a specified period of time. After which, another option must be agreed upon to bring the account current.
- Repayment plan: An agreement where you would resume making your regular monthly payments in addition to a portion of the past-due payments.
- Modification: If you can make payments on your loan, but you do not have enough money to bring the account current or you cannot afford the total amount of your current payment, we may be able to modify the terms of your original loan to make the payments more affordable. Under certain circumstances, we may be able to reduce your interest rate, extend the term of your loan, or add the delinquent interest amount to the unpaid principal balance.
- Partial claim: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor in order to make your account current.
In addition, National City offers the following options for customers who choose the option of giving up their homes in order to obtain mortgage relief:
- Short payoff: If the payoff amount of your loan is greater than the fair market value of your property, you may qualify to sell your home for less than what you owe.
- Assumption: A qualified buyer may be allowed to assume your mortgage, even if your mortgage states that it is nonassumable.
- Deed in lieu: If you have had your property listed for a period of time with no activity, we may accept title to your property as settlement for the debt.
Do you accept partial payments?
We recommend that a borrower contact us before sending in partial payments so that we can work toward a long-term solution.
What percentage of people can expect to get some type of workout of their mortgage?
Our goal is to help every borrower keep his or her home, although it would be difficult to supply a specific percentage. Each situation is taken on a case-by-case basis. What can help the process is for the borrower to contact us when he/she may have trouble making payments. Very often, contacting the bank can be the hardest decision borrowers make when they begin to have difficulty making their payments. However, this is the most important step they can take to resolve the situation.
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Are there fees involved with the workout process?
There are no fees for hardship assistance except for a fee for a completed loan modification.
Does the process differ depending on whether you are a homeowner who is missing a regular payment or a homeowner whose mortgage is about to reset?
The processes are similar.
Is it helpful if they contact a credit counselor who can work with you on the process?
We work closely with counseling agencies and encourage our customers to seek reputable help. We support the HOPENOW Alliance and provide our customers with the (888) 995-HOPE number as a free resource for assistance.
How did it go? Tell us about your experience using this information to work out a solution with your lender.