HOME LOANS EXPLAINED - FAQ

What happens if I miss a payment?

You will be charged a late fee and interest. In addition, the servicer may be obligated to report late payments to the main credit bureaus. Late payments can have a negative effect on your credit rating.

How much will being past-due cost me?

Late charges vary according to the terms of the loan and are based on factors such as the type of loan and the interest rate. For example, if you have an adjustable rate mortgage, your late charges would change as your interest rate changes.

Can a financial institution that has a second mortgage on a house initiate foreclosure?

Yes. The second mortgage lender can foreclose on the property even if the first mortgage is in good standing with its lender. A second mortgage is a secured loan backed by the value of the home, just like the first mortgage. If you thought you were safe by keeping up with the payments on the first mortgage while missing payments on the second, you're not. If the second has initiated foreclosure proceedings, they are well within their legal rights to do so.

How do I get my past-due loan back in good standing?

You'll need to make all your past-due payments as well as pay any fees and interest charged as a result of late payments. To find out exactly how much you owe, you'll need to request a loan reinstatement from the servicer of your loan. If you're unable to catch up on your payments, the Home Owner Assistance Team may be able to set up a plan to get you back on track.

What if I can't make my payments?

Contact a Home Owner Assistance Team member at (888) 696-8585 immediately. Even if you feel you do not have any resources or ability to repay your loan, the Home Owner Assistance Team may be able to help you work something out to save your home or, at the very least, minimize the negative impact to your credit. Doing nothing guarantees the worst possible outcome – foreclosure and severely damaged credit.

Can I refinance my loan if I am past-due with my mortgage payments?

It's best to first contact the Home Owner Assistance Team at (888) 696-8585 to discuss your options.

What happens to my tax and insurance if I am also past due on paying my escrow account?

If you have an escrow account, the servicer continues to pay tax and insurance to protect the property. However, just as with your mortgage, you would still owe this money plus any late fees and interest incurred. The investor can introduce forced placed insurance to protect their investment and this typically cost more than traditional insurance.

What is foreclosure?

Foreclosure is when the lender takes possession of a property because the borrower is unable to make their loan payments. In a foreclosure, the borrower is required to move out of the property once the foreclosure sale is complete.

Why would you foreclose on my home?

We only foreclose on properties as a last resort to minimize losses when the borrower is repeatedly unable to make payments or just stops making payments altogether. However, the homeowner's who make a conscious effort to communicate and discuss their situation with the Home Owner Assistance Team are, for the most part, able to come up with a win-win solution that meets their financial needs and avoid foreclosure.

What can I do if I am already in foreclosure or have already received a foreclosure notice?

Contact a Home Owner Assistance Team member at (888) 696-8585 immediately. Even if you feel you do not have any resources or the ability to repay your loan, the Home Owner Assistance Team may be able to help you work something out to save your home or minimize the negative impact to your credit. Doing nothing guarantees the worst possible outcome – foreclosure and damaged credit.

May a lender perform an interior inspection of the property if they have concerns about the property condition?

Yes, the lender may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the borrower's continued ability to support the modified mortgage payment.

Can I sell my home if the foreclosure has already started?

Yes, but you need to coordinate this with the Home Owner Assistance Team at (888) 696-8585 before the foreclosure sale is completed. You'll also need to list your property with a licensed real estate agent.

Can I sell my home if I owe more than it is worth?

In some cases, you can. This is what is known as a short sale or pre-foreclosure sale. This is something you would need to work out with the Home Owner Assistance Team at (888) 696-8585.

What will a foreclosure do to my credit rating?

Foreclosures are extremely damaging to your credit, and may stay on your credit report for as much as seven years. A foreclosure can make it difficult to get a loan for a future home purchase, for college expenses or to even get a VISA or MasterCard. If the borrower is able to get credit, the interest rates will likely be higher. Even if you're already facing foreclosure, there may still be options to minimize the damage to your credit and do the right thing. Contact the Home Owner Assistance Team at
(888) 696-8585 to find out more.

What should I watch out for when in foreclosure?

Beware of foreclosure rescue scams. Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan. Help is free! Also, do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt. Finally, never make a mortgage payment to anyone other than your mortgage company without their approval.