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?
They should call Chase at the phone number that is on their mortgage statement.
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)?
Borrowers concerned they may miss a payment should call their lender. It is never too early to start the discussion.
Should a borrower ask to speak with someone specific?
If a borrower calls Chase to discuss possible payment difficulties, the initial discussions will be handled through the customer care department.
A borrower who goes into default will be assigned an individual Chase representative who is trained to understand the customer’s individual financial situation. The representative will help the customer try to bring the loan up to date.
If the problem is long term, each customer will be assigned to a homeowner’s assistance representative. The specially trained representative gets to know the customer’s individual circumstances, income and expenses.
What information should borrowers have available when they call?
Initially, the borrower should have their loan information including the loan number that can be found on their statement.
As the process moves forward Chase may ask borrowers for additional information. For example, in the loan modification process Chase asks borrowers to provide their two most recent bank statements, their two most recent pay stubs, their most recent federal income tax returns and a hardship letter.
What types of solutions might be available to borrowers?
Chase continues to explore and implement additional ways to assist customers and keep them in their homes. These include:
- The Foreclosure Rescue Program. Designed to help any customer serviced by Chase at any point during the foreclosure process. Up until five days before a foreclosure, Chase will put it on hold and review the file to see if anything can be done to prevent foreclosure.
- The Enhanced Streamline Refinance Program. Uses prequalification and streamlined documentation to convert more customers with Chase-owned adjustable-rate mortgages to fixed-rate mortgages with minimal processing.
- Local efforts. These include foreclosure prevention meetings at a local hotel or church that connect Chase representatives face-to-face with struggling homeowners. Sponsored by community groups, the government or simply by Chase, the meetings have shown promising early results.
In December 2007, Chase joined with government and industry leaders in supporting a new federal initiative designed to keep more homeowners in their homes. The five-year, interest-rate freeze for qualifying borrowers will help Chase further streamline its process to review and approve loan modifications for qualified homeowners.
|To qualify for the ‘fast track’ program, borrowers must:|
In February 2008, Chase joined with other major servicers in announcing
Project Lifeline, which can stop the clock on the foreclosure process for 30 days for homeowners who are 90 days or more behind on their mortgage payments.
As with other efforts, the goal is to get homeowners in contact with Chase to determine if a modification or refinance can be worked out. The lifeline is being offered to people with any residential mortgage for their primary home — not just subprime borrowers.
Do you accept partial payments?
No, Chase accepts full monthly payments only.
What percentage of borrowers can expect to get some type of workout of their mortgage?
In total, Chase has modified or refinanced $3.6 billion of subprime ARMs and is processing $3 billion more. Together, that’s 51 percent of all Chase-serviced subprime ARMs (59 percent of the total dollar amount) due to reset by March 2008.
For prime borrowers — a larger group with larger mortgages — Chase has made more than 1 million contact attempts, resulting in the modification and refinancing of more than $415 million of prime ARMs.
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At this time, Chase does not have statistics about fixed-rate borrowers who have received a workout of their mortgage.
Are there any fees involved in the workout process?
Chase charges no prepayment or modification fees when the homeowner’s assistance department modifies the loan to make it affordable. However, borrowers who miss a payment may be charged a late fee or other penalty fees. For this reason, it’s important to contact Chase
before missing a payment.
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?
The process may differ a bit, but the Chase specialist assigned to the borrower will review options and determine what solutions are the most appropriate and affordable for the borrower.
Is it helpful if they contact a credit counselor who can work with you on the process?
Chase knows that worried homeowners might be more comfortable seeking help from a trusted
community group and might not respond to the company’s outreach. So, Chase created its Homeownership Preservation Office in 2004 to make it easier for those nonprofit community groups to talk directly to Chase about customers at risk of losing their home. Chase then works with the community group to provide in-depth counseling to the homeowner in distress.
Borrowers should contact their city’s housing department to find information about city foreclosure prevention programs or to be directed to a community group to speak with about preserving their home ownership.
Homeowners can also call HOPE NOW at (888) 995-HOPE (4673) to speak with a HUD-approved counselor to receive foreclosure avoidance help.
How did it go? Tell us about your experience using this information to work out a solution with your lender.