Falling behind on your mortgage may be stressful, but don’t lose hope. From loan modification to help from the federal government, there are many assistance options that have helped homeowners get back on track.
We’ll do everything we can to determine your eligibility and match you with the help you need.
To simplify the process, you’ll only need to fill out one general application. Once we have your completed application and all your supporting documentation, we’ll determine which options you qualify for and which is best for your situation.
If it’s getting harder to make your payments but you haven’t fallen behind yet, you may have a simple, effective option: Refinancing your mortgage to one with a lower monthly payment.
To refinance as part of a mortgage assistance plan, your account needs to be current for the past six months. Also, there can’t be more than one late payment on your record over the past twelve months.
There are a few other eligibility requirements we’ll be glad to go over with you when you call.
If you qualify, refinancing can be one of the easiest ways to get back on track without big impacts to your credit score or living situation.
If you fell behind on your payments due to a temporary hardship—such as a big medical bill or drop in your small business’s revenue—but you’ve returned to a point where you can pay your amount due each month, you may be a candidate for a repayment plan.
If you qualify, we’ll spread the sum of your late amount due over a manageable timeframe. Instead of owing it all at once and potentially incurring late fees, you’ll just have a relatively small increase to your future monthly payments until you’re all caught up.
Like all mortgage assistance options, the sooner you let us know about your need for help, the more likely a repayment plan will be available to you.
If you’re facing long-term hardship, we can see about modifying your loan so it has more manageable terms.
While refinancing means replacing your existing loan with a new one, loan modification keeps your existing loan and changes its terms.
If you qualify for loan modification, we’ll look for a way to reduce your monthly payment. Maybe we’ll be able to lower your interest rate. Or maybe we can extend the loan’s timeframe so we can lower each month’s payment.
You may be eligible for a loan modification if each of the following is true:
- The mortgage is more than 12 months old.
- The property has 1-4 units.
- You have experienced a hardship and are unable to maintain your current monthly payments.
Specific eligibility requirements may vary depending on the loan’s investor or other factors.
We will also obtain a property value estimate to help determine the best modification plan for you.
Trial Period Plan:
If you’re approved for a loan modification, in most cases, you will be required to first complete a Trial Period Plan. This is a temporary payment relief period that allows you to demonstrate that you can consistently manage the estimated modified mortgage payment.
You will have a new monthly payment amount during this Trial Period Plan. If you make timely payments and meet all requirements stated in the Trial Period Plan terms, the permanent loan modification documentation will be prepared and sent to you for finalization.
Sometimes, unfortunately, there isn’t a financially feasible way for you to keep your home. (Or perhaps you’d prefer to leave, given the circumstances.)
In such cases, there are options that can give you a fresh start without the difficulties of the foreclosure process.
A common option is a short sale. Pending investor approval, a short sale can allow you to sell your home for less than you owe on the mortgage.
After we talk with you and agree that a short sale is your best option, have your realtor start an application for a short sale at equator.com.
The following documents will likely be required if you do not already have an offer:
- Third party authorization form that allows your agent to speak with us.
- Listing agreement
- Hardship package (hardship affidavit, 4506-T form, and financial worksheet)
- MLS listing
If the financial package is incomplete, the short sale process could be delayed.
At this point, your agent should list the property and attempt to get an offer. Depending on the timing of the application and investor requirements, you may be provided with a time period to market the property and a pending foreclosure may be placed on hold. The hold is not guaranteed in all cases and is temporary. The sooner an offer is found, the better. Mr. Cooper has a Listing Assistance program which may provide assistance in finding an offer.
If there is an offer on the home, then the following documents will also be required:
- HUD-1 settlement statement
- Proof of funds statement
- Purchase agreement
- Any other documents that pertain to the real estate sale
Once Mr. Cooper is able to review an offer on your home and we have a complete short sale application, we will provide a decision within 30 days. Some investors may require the property to go through an auction process in order to validate whether the offer received reflects the market value, but this will not delay the 30 day decision process.
If you are able to sell your home, the sales proceeds will be applied toward your mortgage debt. In some cases, the remaining mortgage debt may be forgiven depending on state law and investor requirements. You’ll also avoid the foreclosure process and get a head start on repairing your credit.
An alternative to a short sale is called Deed-In-Lieu of Foreclosure.
Deed-in-Lieu means that you transfer ownership of your home to your lender. This is a more streamlined process than a foreclosure, and it may have less of a negative financial impact on you.
With a Deed-in-Lieu arrangement, you’ll have plenty of time to plan your move and transition out of your home. You may also be eligible for relocation assistance or assistance with paying other liens and judgments against your property.
These arrangements are subject to investor approval and certain other eligibility factors. We’ll be glad to talk all this through with you when the time comes.
You’ll need to complete the Statement of Information form during the Deed-in-Lieu process.