It’s very important that you understand that you shouldn’t spend your mortgage payments. It may be that you’ve not sent the mortgage company your payments or that you can’t pay the payment the mortgage company wants, but either way you shouldn’t spend the money. You need to put it away and save it.
The main reason is that no lender will agree to anything without both a signed workout agreement (usually notarized), along with certified funds for some type of down payment, good faith payment, or borrower contribution.
The Lender wants to be sure that you’re taking this seriously and that you’re willing to make some sort of payment along with your work out agreement. This payment has to be made via cashier’s check. No personal checks are accepted. How much will you need to pay? It may be necessary to pay 35 to 50 percent of the arrears. If you negotiate, you may be able to get this percentage lowered to between 15 to 30 percent. This is because the lender wants to get the loan current as quickly as possible, as well as to make sure you have “skin in the game.” Saving the monthly payment is a good way to keep the chips on your side, and can be used as a bargaining tool.
As stated earlier, these negotiations are really simple. Just don’t agree to something you know you can’t afford. Don’t get bullied into accepting something just because you think that’s all you can do.
Stopped Foreclosure!
When you’re satisfied you have the best compromise for your situation, you’ll ask the lender to draw up the paperwork and send it to you via mail or Fax.
Confirm the Terms
Once your lender agrees to your terms, and sends you their Modification Agreement, you’ve successfully performed your loan modification. The only thing left to do is sign and return, and all is done.
However, you have to then look deep into yourself and ask yourself some tough questions. You’ve accomplished your goal, but is this the right solution for you at this time?
Now is the time to really answer that question, before you dig yourself deeper in the hole. This is a personal decision, and should not be taken lightly.
So, now’s the time to decide if you’re going to stick it out, or if it’s time for you to BAIL!…
You’ve decided to stick it out? Good choice! There’s no shame had you decided otherwise. You have to do what’s best for you and your family.
So let’s move on…
Once you receive the agreement, you should first confirm that this is what was agreed to by you and the lender. If not, you’ll need to get on the phone to find out why the agreement on paper is different than what you agreed to over the phone. Upon satisfaction, this agreement will have to be signed and notarized and then will have to be sent back to the lender via an overnight service.
Next Steps
Remember, your good faith payment will also have to be sent with the document. You can send it by certified check or by using a money order. Or, you can wire the funds to the Lender. And if you’re going to wire the money, don’t forget to ask the bank for their wiring instructions.
Remember the good faith payment is an important step; one that lets the lender know you’re willing to work this out
Congratulations
You have successfully saved your house! Be proud of the place you’ve kept for your family. Keep up with the new terms and enjoy your life with reduced stress.
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