Working with Your Lender to Avoid Foreclosure

When you call your lender, be sure to have your account information handy and be ready to give a summary of the financial problems you are having. You should also have recent income statements and your household budget with you.

If you don't have a budget, now is the time to know exactly what you are spending each month. If you can, have your budget information on hand before calling your lender.

Be prepared for more than one conversation. Your lender may require you to complete a loan workout package. It is important that you complete it as soon as you receive it because in some cases the lender cannot proceed to the next step without the completed and signed documents.

Questions to ask:

• How much time is the lender willing to give you to complete a work-out?
• What are your obligations under the work-out package?
• What are the specifics? Be sure to ask what is due and when.
• Will a foreclosure sale of your property be put on hold while your lender looks at the possibility of a workout package?

Visit the Mortgage Bankers Association's Foreclosure Prevention Resource Center for advice on calling your lender for assistance.

Preparing for Your Conversation

Be ready to provide a short explanation of why you are unable to pay your mortgage payment. Did someone lose a job? Is there a medical emergency? Are you current on your loan but have not been able to refinance into better terms?

You'll also need to provide your lender with important information about your property, income, and debt obligations.

Being prepared for this conversation will help your lender understand your case and see if you qualify for a loan modification or other mortgage workout.

If you need assistance and cannot reach your lender, you can contact one of the local HUD-approved counseling agencies in your area or call the Homeowner's HOPE^TM Hotline at (888) 995-HOPE.

A reputable housing counseling agency can help a great deal but a disreputable one can cause more harm than good. Be sure to ask questions to make sure you are dealing with a reputable counseling agency.

Help is Free

Beware of anyone who asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Help is available for free.

If Freddie Mac owns your loan, we can help you get in contact with your mortgage servicer. Your servicer should be able to tell you if your mortgage is owned by Freddie Mac. You may also use our secured look-up tool: Does Freddie Mac Own Your Mortgage?