Lenders Aren't the Enemy, They Can Help You.

Working With Your Lender to Stop Foreclosure

Before your lender begins the process to foreclose your home, you can often negotiate with your lender to stop the foreclosure process before it begins. While many homeowners in trouble see lenders as the enemy, the truth is that lenders do not want to foreclose on your property any more than you want to lose your home. Lenders are usually answerable to shareholders and foreclosures look bad to shareholders. There is often a lot of pressure on lenders to make sure that home loans are paid off in some way.

Your lender will be far more receptive to negotiation if you approach the lender early. Keep lines of communication open and contact your lender as soon as you realize you will have trouble making a mortgage payment. Never ignore a lender's phone calls or mail.

Getting Your Financial Documents

If you need to contact your lender about a missed or delayed mortgage payment or other problems, have some documents at hand. Your lender will need specific financial information from you to help you, so before you call make sure that you have:

• Your most recent bank statements
• Your latest tax return
• At least your last two recent pay stubs
• Proof of Social Security Payments or alimony, if you receive them
• Recent bank statements
• Information about any liens or additional loans on your home
• Information about any additional debt you have
• Account information (for your checking account and any account associated with your mortgage)
• Information about the financial problems you are having
• Your budget, including a list of itemized household expenses
• The most current assessment of your property's value

Keep in mind that you may have to share lots of financial information with your lender and explain your situation in depth. Some lenders may require you to fill out a "loan work-out" package before any negotiations take place. This package allows the lender to receive all your relevant financial information. It may take a few phone calls to resolve the situation, so stay organized and keep working to find a solution.

Negotiating With Your Lender

If you are negotiating with your lender or have filled out a "loan work-out" package, make sure that you ask questions, too. You need to know what is expected of you and what you need to do for a good outcome. For example, you will want to ask your lender:

• Will a foreclosure sale be delayed on your property while you are negotiating with the lender? If so, for how long?
• How long will the lender be willing to work with you for a loan work-out?
• What must you do to meet the terms and conditions of the loan work-out? What must you pay and when?

The more you learn about the negotiation process and your options, the better prepared you will be to negotiate with your lender. Use quality resources such as StopForeclosuresHelp.com to learn more. If your loan is owned by Freddie Mac, Freddie Mac may be able to assist you as well.