Consumer Assistance

T  o avoid a forced foreclosure sale, you have multiple options to consider. Some of these can allow you to keep your home and your credit rating intact, while others may involve the sale of your home to preserve your credit. Working together, you and your PTI Credit Counseling  Partners can work out the best possible plan for your needs.

You may want to consider  -  Mortgage Modification – You may be able to refinance the debt and/or extend the term of your mortgage loan. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem but your net income is less than it was before the default (failure to pay).

In the past, getting a Mortgage Modification was fairly simple. The banks were not overwhelmed with requests and when someone did need help, they had plenty of time to try and figure out a solution. Today things are much different; mortgage companies and banks have thousands of foreclosures to deal with and they all seem to be losing money and going out of business, because of the foreclosure crisis. What used to be a simple process is now one of the hardest ways to stop foreclosure.

When a lender agrees to do a modification, they are taking a big risk. They are offering you a chance to stop the foreclosure and get a fresh start, after they’ve spent money trying to foreclose on you. If you stop making your payments after the loan mod, they will have to start the process from the beginning and it will cost them even more money the second time around. This is why lenders rarely offer a mortgage modification as their first solution. In most cases, they do what’s called a workout plan. This gives you the opportunity to make several payment, for them to determine if you can truly afford the mortgage. The payments in a workout plan are higher than the modification payment would be, so if you can make those payments, they’ll feel comfortable offering the complete modification.

A mortgage modification is when the lender combines the total amount owed on your mortgage, including all the missed payments and fees and changes the terms of your mortgage to (basically) reflect a new mortgage. Sometimes they will re-amortize the loan, or lower the interest rate, or both. The end result is immediately stopping the foreclosure and new monthly payment.

Loss Mitigation is a term used when the repayment terms of your loan are negotiated with your lender. Many people seek professional negotiators to handle loss mitigation, because it can save a home owner ten’s of thousand’s of dollars over the life of the loan. However, loss mitigation is something you can do on your own, if you have the time and experience. Just as a successful negotiation with your lender can save your home, a bad negotiation, or revealing too much information, can virtually guarantee the loss of your home. It is imperative to understand what you are up against before you attempt to negotiate on your own.

A good loss mitigation company or negotiator will know exactly who to talk to at your bank and they will have specific experience with your lender. In some cases, like us, companies will have an established relationship that allows them to present complete packages and immediately get a mortgage modification approved. This is the type of experience you are looking for when you are facing foreclosure.