Lenders Are Being Nicer, Talk To Yours!

Talking directly with your lender is the #1 absolute best way to deal with being late on a payment because they’re the ones with the most power in settling something reasonable. When other parties come into play, they will want a piece for their own time and so the number of hands reaching into your pocket will increase until you can’t possibly get back on track. Don’t think of it like you’re in trouble and they’ll be scolding you, they aren’t; think of it like you’re going to get back on track, make amends, and they’ll work with you.

In the current economic environment, after the first of the subprime issues are resolving themselves, lenders recognize that ARMs are resetting and some folks will not be able to pay. Rather than foreclosing, lenders are going to want to work with these borrowers, such as yourself, to reach an amicable solution because foreclosure generally results in a loss for them, especially given the recent drop in home prices.

“Servicers are beginning to understand that they’re better off renegotiating,” said Bruce Dorpalen, director of housing development for the Association of Community Organizations for Reform (ACORN), a non-profit community development group. Their average loss on a foreclosure for a lender is now $58,000, he said. (source)

$58k loss is average, meaning some are more! Banks don’t roll the dice, they analyze the numbers and they’d rather talk to someone, lose a few thousand but get back on track (especially if they can earn hundreds of thousands in interest over the life of a loan) than take that $58k hit.

If you’re in trouble, your first phone call should be to your lender.