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Insider Tips: What Lenders Are Looking For When Deciding To Save You From Foreclosure


Foreclosure is something that can happen to anyone at anytime. While it is easy for some people to think that it will never happen to them because they are responsible and have a good job, it is not something that can be avoided in some cases.

It is important to know that while there are some cases where the foreclosure is the fault of the homeowner, more times then not, it is something that could not be avoided. This means that you should not beat yourself up too bad over the start of a foreclosure, as you are probably just one of the millions of people who fell into a bad situation that they were unable to get out of.

First, it is important to understand what foreclosure is and the process of it in order to truly be able to get into the mindset of the lender. Foreclosure is the legal process in which the bank is allowed to seek out the repayment of the money they lent out.

This is done through auctioning off the house. Once a homeowner gets three or more payments past due, the bank has every reason to exercise their rights and begin the foreclosure process. Remember though, foreclosure is a process and it is not something that you should run away from. Just because a letter of notification comes in the mail does not mean that you have to move right away.

In most cases, there is still plenty of time to save the home from foreclosure. You can either bring the account completely current, refinance the mortgage, or get set up on a repayment plan or get approved for a loan modification.

Either way you decide to go, it is important to make sure that you have a game plan in place in order to give yourself the best shot at getting the results you want.

If you are looking for a repayment plan or to be approved for a loan modification, it is important to know that a lot is riding on the opinion of the lender. While some things are black and white, the lender has a lot of room to make decisions based off their better judgment.

Since the repayment plan and the loan modification are not things that you are entitled to, they can decide to not help you if they so see fit. Because of this, it is vital that you are aware of the typical things that the lender is looking at when it comes to helping you save your home from foreclosure.

The insider tips are what could make your case so that you are able to get the help you need before you are left without a home. Pay attention to the tips and then plan out what you are going to say to the mortgage company.

Does The Borrower Explain His Or Her Faults?

Most of the time, the people who make the decisions on whether or not you should be help are nothing more then a collection agent or an agent within the loss mitigation department. They are trained to ask you a series of questions. In the minds of many of the employees, the homeowner has done something wrong in order to be unable to make the payments. If in fact your reason for falling behind is that you overextended yourself and your finances, you will want to admit that.

While that may seem like the last thing that you will want to do, it is the best thing for you. Whether you admit this fault or not, the lender will be able to see whether or not this is truly what happened to you once they pull your credit report. For a loan modification and sometimes for a repayment plan, a credit report will be pulled in order to make sure that you have sufficient income to keep the home.

If you admit that you were wrong in over extending yourself and you have a plan of action ready for how you are going to resolve the situation, you will have the upper hand. Even if your answer is that you simply are going to stop making the credit card payments while on the mortgage repayment plan, you are on the right track. It shows that you are able and willing to put them first. This is something that they like to hear.

Does The Customer Update Their Personal Information?

If a customer gives the lender a hard time with updating such personal information as expenses and income, the lender is likely not going to approve any assistance. It is vital to make sure that you are giving the lender all of the information requested from you.

All of the information they are asking for is vital to the approval process of all of their programs and benefits. Those who absolutely refuse or who simply give a hard time about it will most likely find that they will not be helped.

Remember, the mortgage company is doing you a favor by offering these programs. Nowhere in your contract does it say that they have to offer such assistance. They could in fact deny you and they could stop offering these programs all together.

Simply suck up the pride and answer the questions. Do not take offense and certainly do not give an attitude.

What Is The Payment History Like?


Here is the hard part. If you are dealing with a tough agent then you may start sweating bullets if you are not properly prepared. Let's say that the reason you fell into foreclosure was because you were laid off four months ago and could not continue to make your payments.

But, according to the payment history that the agent is looking at, you were being reported to the credit agencies every month for being late with your payments. In the eyes of the foreclosure or collection agent, being laid off was not what your true reason for delinquency.

They want to know exactly what it was that caused you to fall behind from the very beginning. You may want to go over your payment history before calling in for help so that you can look through the dates and try to remember what it was that made you fall behind in the first place. The more information you have for the lender, the better.

Is The Customer Looking For More Income?

Even though you may already work forty hours a week and have a family at home, in the eyes of the lender, you need more income for the time being if you are behind on your payments. By taking the lead and explaining that you are looking for additional work or trying to work over time, they will see that you are truly trying to do your best to bring everything up to date. Even if you state that you are going to baby-sit a couple nights a week, that is better then nothing.

You also want to make sure that you are explaining that you completely understand that the only bill that matters right now is that of your mortgage. Let them know that you could care less about the credit cards or the utilities. The credit cards can wait and the lights can be shut off. After all, there is no reason to be up to date with the electric bill if you are going to end up without a house for the lights to be turned on in.

Even if everything gets shut off and you have to stay the nights at a friends house, your home would be saved and you can always have the utilities back on. Turning on such things is a lot easier then getting another home.

Even though it sounds like you are are trying to butter up to the lender, it is vital in order to make sure that you are doing everything they want you to do. All that the lender has to determine whether or not you are serious about keeping your home and not falling behind again is what you say to the agents on the phone.

That phone call will make or break you and it is important that you keep that in mind at all times. And remember, even though this is a frustrating time, this is not the time to take out your anger on the collection agent. The agent is simply doing his or her job and they are the ones that could help you with options or allow your home to be foreclosed on by not giving assistance.