Home Loans Articles


Mortgage Loan Payment Problems

If you are struggling to pay your mortgage loan payment every month, the first thing you need to do is speak to your lender so that you can make some sort of agreement. Regrettably, lots of borrowers do not follow this advice; studies show that at least 50% of borrowers who have missed a payment or defaulted on their loan never contacted their lender.

The function of a bank is not property management, so they prefer not to take back your property. They are more disposed to work out an agreement with you so that they can collect your mortgage loan payment and you can remain in your house, instead of going through the foreclosure process which can be costly.

Contacting Your Lender

Even though it might be something you don't relish, you must make that first phone call to your mortgage or loan company so you can discover what your options are regarding your mortgage loan payment and what needs to be done after that. Which department do you speak to and who do you ask for?

You have to understand how banks and financial service companies work and which department you need to focus your efforts on. This will depend on what phase of the default process you are at.

Customer Service Department

First, there's the customer service department which can answer any general inquires and will be able to help you with your account if it is current. If your account is not current, then you will need to contact the second level contact department.

Collection Department

The second level contact is the collection department. This is typically the first department when your account initially becomes delinquent that you are transferred to. The one major purpose of this department is trying to collect a debt. They will try to get you to pay any money that you may owe the lender and they aren't in the business of negotiation.

Loss Mitigation Department

The third level is the loss mitigation department which is the most important if you are trying to get a home loan modification. It is sometimes known as loss prevention, loan modification, loan resolution, or foreclosure prevention department. Ultimately, they all mean the same thing; helping you to work out some agreement to make your mortgage loan payment.



You may find that these departments do not want to speak with you at first. Many banks prefer that you speak to the collection department first and do not provide any direct numbers to the modification departments. Some banks will even tell you that they do not have a mitigation department. They all do, so you must be determined.

The loss mitigation specialists are loan officers who will study loans on a case by case basis to see if they qualify for a loan modification. It is important to understand that not all loans qualify for home loan modification.

Home Retention Department

The final department is the Home Retention Department. Not every bank has this department, and some will just have one Loss Mitigation department to handle all cases which have gone into default, no matter what stage they are at. This department is basically the last stop before they start the foreclosure process, but they will more often than not be able to offer a last resort to foreclosure. When you contact your lender by phone, you will normally be on the phone for quite some time and you could be transferred several times. Remember that you can cut this time short if you know which department your loan will be handled by.

When you have been transferred to the correct department, try to speak to some one who can be your contact directly on your case. This way, you will always be speaking to the same person. Make sure to get their direct extension as well as their fax number.

For every time that you speak with someone, make sure that you write down their full name or ID number, their department, and the day and time that you spoke to them. So long as you are persistent and speaking to the right person in the right department, you should achieve your goal!

Summary of Mortgage Loan Payment Problems

Remember, if you have a mortgage loan payment problem, do not pay thousands of dollars to a loan modification company for something that you can do yourself. For futher reading, see this link here: http://www.consumer.ftc.gov/articles/0187-when-paying-mortgage-struggle