Here are the 3 Stages you go through in the foreclosure prevention process.
Stage 1: The Process Begins With You
If your goal is to save your home then the process should always begin with you. Which means you should take action as soon as you become aware you're in financial trouble. Once you know you're going to have a problem making your monthly payment it's very important that you initiate contact by calling your mortgage lender or servicer, and making them aware of your situation.
IMPORTANT: Before calling be sure you've gotten together all the documentation you'll need to demonstrate clearly what's wrong. This includes - the reason(s) you've fallen behind and expect it to continue; your proof of income; and a complete listing of your monthly expenses (fixed and variable).
Having all this information beforehand will speed up the process considerably, while showing your lender you're a responsible person and you are taking your situation seriously.
Stage 2: Your Lender Takes Action
Your lender or mortgage servicer will want documentation (written evidence) of all the information you've given them over the phone. So gather all the paperwork together and make copies of everything - one for your records, and one to mail to your lender. Then send it to them as quickly as possible!
Upon receipt of the documents the clock "starts ticking" (from the lenders point of view ... your clock's already going). Your lenders goal will be to get back to you within 30 - 45 days with a decision. However don't be suprised if it takes a little longer, considering the state of our economy. Another factor that could delay things is if you've sent them incomplete information and they have to wait for you to supply them with everything they need.
If it's determined you qualify for a loan modification a letter will be sent to you explaining the terms of your new mortgage, including the amount of your new monthly payment, and a schedule showing when the first one is due.
Stage 3: The Execution
Your loan is reinstated, your payments are brought current, and you have a modified plan with a new, affordable monthly payment. You're able to keep the home you've worked so hard for, and your credit is re-established and in better standing. All because you were proactive and did what you needed to to stay in your home!
