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Reply #3: pay minimums on the HELOC for a while. Keeps you current and [View All]

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yellowdogintexas Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-23-08 10:54 AM
Response to Reply #1
3. pay minimums on the HELOC for a while. Keeps you current and
keeps that off your credit score. Hit the principal on that one later.

Be sure you are both authorized to discuss the account with the lender before you call. !!!
Otherwise only your partner can do the talking.

Talk to the lender. BUT BEFORE YOU DO:

Many lenders will tell you they can't do much until you are actually 90 days or more in arrears. That means (using October 1 as the first defaulted payment) that the payment which should have been received in October is not received by December 31. So even if your Oct payment is late, it postpones the foreclosure. So continuing to pay even if you are 30 days late a couple of times, is better than not paying at all. Neither option is better or worse for your credit score, what we are talking about here is losing the property. Many lenders will work with you on setting up a payment plan that allows you to put 'X' amount each week and when enough is there to make a payment it rolls out to the payment side. This keeps you out of the danger zone for foreclosure if you are able to make that payment. They will review your financial obligations, and income and determine if they can do this. Sometimes they can't because of your state regulations, or terms of the loan, but if they can they will especially in this market.

The amount of time before a lender can begin foreclosure is based on the terms of the NOTE, not the mortgage. The note is drawn up in accordance with state banking regulations where you live. Get out the loan documents for the mortgages, and if you are with a major lender you can view them online. The terms of default should be clearly stated in the Note.

The mortgage is the legal owner ship part of the deal. The NOTE is the financial transaction part of the deal.

are both loans w/same lender?
Things to ask:
can they be combined, at a lower rate of interest, or can the main mortgage be refinanced at a lower rate of interest.
do you have taxes and insurance in escrow? Is there any overage in the escrow?(a call to customer service will help with these and the following questions)
Can you acquire less expensive insurance, which would lower the escrow portion, and lower the payment, and/or create an overage in the escrow account (or a refund from the old insurance co)
Are you sure your property taxes are as low as possible? Do you have a homestead exemption in place, if your state offers one?
is there PMI on the loan that can now be taken off?
if it is an ARM, does it qualify for workout to reset it at a fixed rate lower than the current rate?

I was a CSR in a call center for a Major Lender, and I specialized in Escrow account servicing. Sometimes all the pieces fell into place enough that we could generate some funds for the homeowner which we rolled over to the mortgage, or put in partial payment for the homeowner to supplement to create a monthly payment.

If you can ride out w/o triggering a foreclosure and keep the payment under 90 days in arrears, when you file taxes, if you get a refund, you can use it to catch up.

In the current climate, the lender does not really want to foreclose, it is a money loss for them.

I hope this helps. When you do make your call to them, you will be asked questions which will trigger other questions on your part, take notes. It can get hellaciously confusing. The rep has your entire account history right there on the computer, and all prior calls should be documented.

I strongly recommend you review everything you can about your loan(s) on line before you call, print out stuff to have handy if you need it, reviewed and highlighted.

Most mortgages do not have a late fee until 15th of the month, some are 10 day. But the report to credit services is based on what is in the system on the final day of the month. Verify how your lender determines final day of the month when it falls on weekend.
Pay on line whenever their system will allow it if you have to pay at last minute, because it posts instantly. My old company would allow up to 30 days late to pay on line, but would not take partial payments.

I wish you all kinds of luck with this, and I hope I have helped you some.
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