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?

If borrowers are delinquent or know that they will be, they need to contact Countrywide immediately by calling (800) 669-6607.

When should borrowers call you — before they’re late with their first payment, or sometime later on (e.g., 60 to 90 days after missing the first payment)?

The sooner Countrywide is contacted, the better the chance of developing a successful home retention plan.

Should a borrower ask to speak with someone specific?

When a borrower calls (800) 669-6607 and follows the prompts, the call will be sent to the correct team for assistance.

What information should borrowers have available when they call?

In order to determine the best short- and long-term solutions, borrowers should be prepared to provide the following information when contacting Countrywide:

  • Account information. Countrywide needs basic information, such as the loan number, property address and borrower’s current mailing address.
  • Employment/income/expenses. Information about the borrower’s current employment status, as well as the current income for all obligated borrowers or individuals contributing to the household’s monthly budget. Countrywide wants to see evidence of two months’ income and a list of the household’s monthly expenses to help determine whether the income will be sufficient to cover the borrower’s current obligations.
  • Pertinent assets. Information about the current value of other assets available to the borrower including other real estate, bank accounts, investments or retirement funds. The borrower will also be asked about the value of any vehicles owned plus the amounts owed on the vehicles.
  • Personal circumstances impacting the ability to repay. The borrower should provide information concerning any personal circumstances that are currently limiting the borrower’s ability to pay the mortgage — for example, illness, loss of employment, change in earnings, divorce or death of a wage earner.
  • Status of the property. If the property is for sale, Countrywide will need to know the Realtor’s name and contact number and whether or not the borrower currently occupies the property or holds it as an investment (e.g., rental or otherwise vacant).
  • Bankruptcy. If the borrower has filed for bankruptcy protection, creditors must stop any attempt to collect outstanding debts. If the borrower or the borrower’s representative presents a specific repayment proposal to a creditor, Countrywide is permitted to either accept or deny that specific proposal. If Countrywide does not accept the proposal, the company is unable to offer alternatives as this may be viewed as an attempt to collect the debt. It is usually best that borrowers who are subject to bankruptcy protection use their bankruptcy counsel/attorney to assist in debt-related negotiations.

What types of solutions might be available to borrowers?

While each situation is unique, Countrywide may be able to offer one of the following options:

Temporarily delaying payments. Also known as “forbearance,” this is a formal arrangement that either suspends or reduces monthly payments until the borrower recovers from the financial setback.

Recovering from missed payments. Also known as a “repayment plan,” it is a written agreement between the borrower and the lender outlining how to handle missed payments. It involves spreading the delinquent amount over several months (in addition to regular payments) until the loan is brought current.

Modification of loan terms. A modification is a temporary or permanent change to one or more of the loan terms in order to get the payment down to a more affordable amount. Methods include changing the loan’s interest rate, extending the time available to repay or re-amortizing the loan balance. This option is not available on all loan products.

Refinancing the home loan. Pays off the old loan with a new loan that has different terms more suited to present circumstances, designed to establish a lower monthly payment amount than the original loan.

There are also options available if financial circumstances have dramatically changed and the borrower can no longer afford the home, needs to relocate or just wants a fresh start.

Early understanding of this will aid in the ability to sell the home and avoid a foreclosure. If the loan balance exceeds the value of the home, early contact with the lender will help determine if there is a possibility to accept a reduced payoff amount.

Do you accept partial payments?

Partial payments are handled on a case-by-case basis and are based on specific criteria such as loan type and situation.

What percentage of borrowers can expect to get some type of workout of their mortgage?

In 2007, Countrywide helped more than 80,000 borrowers keep their homes. Countrywide borrowers avoid foreclosure 70 percent of the time when they engage in loan workouts.

Find your lender
1. Bank of America 6. National City
2. Chase 7. Wachovia
3. Citigroup 8. WaMu
4. Countrywide 9. Wells Fargo
5. IndyMac

Are there any fees involved in the workout process?

Typically, there are no fees for the workout process. However, some investors may require a fee for administrative expenses related to loan processing. Meanwhile, if fees accumulated over the natural course of servicing the loan — such as attorney fees, inspections or escrow fees — these will still need to be paid.

Does the process differ depending on whether you are a borrower who is missing a regular payment or a borrower whose mortgage is about to reset?

There are established relief programs for borrowers with a subprime hybrid adjustable-rate mortgage, or ARM, loan. In some cases, the rate can be set back to the most recent rate or the initial loan rate based on the individual’s circumstances. There are additional programs available for borrowers with a different loan product who may have missed a payment and have demonstrated a hardship.

Is it helpful if they contact a credit counselor who can work with you on the process?

We certainly work with credit counselors, and some borrowers may find their assistance helpful, but we will work directly with borrowers as well.

Borrowers can contact the nonprofit Homeownership Preservation Foundation (HPF) at (888) 995-HOPE, or (888) 995-4673 for free foreclosure prevention counseling. The cornerstone service of the Minneapolis-based HPF, the Homeowner’s HOPE hot line is a free 24/7 counseling service that connects borrowers with expert HUD-approved counselors to help find a solution to overcome financial difficulties and possibly avoid foreclosure.

For more information about HPF or the Homeowner’s HOPE hotline, visit

995hope.org.

For additional foreclosure prevention tools and resources for homeowners, visit

Countrywide’s HOME site (Homeownership Mortgage Education).

If the borrower is using a representative, like a nonprofit housing counselor, attorney or a trusted friend or relative, lenders will need a written authorization signed by the borrower granting permission for the mortgage company to communicate personal financial information to the representative.

Borrowers are urged to beware of foreclosure “rescue” scams. Unfortunately, scam artists seek to prey on the desperation of people who are willing to consider nearly any option to keep their home. Borrowers need to be wary as they pursue ways to avoid foreclosure.

Borrowers are urged to:
Make sure credit counselors work for a HUD-approved organization.
Beware of anyone who offers to buy their home and “help” buy it back later.
Avoid offers that require a payment for counseling and other help.
Not sell their home without first talking to their lender.



How did it go? Tell us about your experience using this information to work out a solution with your lender.

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