DABDA is an acronym used in psychology, usually to describe the 5 steps of the grieving process. But these stages can be applied to most difficult situations with which people are presented, such as being in default with one's Lender. They states are:
- Denial - "My Lender is really not going to foreclose on me."
- Anger - "I don't deserve this. Why is this happening to me?"
- Bargaining - "If this all goes away, I promise to quit smoking, be a better person, etc."
- Depression - "This is the worst thing that could happen, and it ruins everything."
- Acceptance - "Okay. I don't like it, but I am in default."
One must move past each of these stages to begin saving your home. Once one does, it is then time to take Action. One's default is not going to go away or stop on its own. As such, all of one's actions should be toward achieving one, clearly defined goal: avoiding foreclosure. And people must believe that in many instances they have it in their power to accomplish this goal. If a person is presently facing default, one can and should attempt the following:
- Ask the Lender to modify the terms of the loan;
- Refinance the home;
- Sell your home;
- Offer the lender a deed-in-lieu of foreclosure.
With regards to a Loan Modification Agreement, in many cases, one can accomplish this by simply following this 8 Action Step plan:
- Immediately contact the Lender. Virtually all mortgage Lenders have a department dedicated to working with borrowers who are in default. This is usually called the "Loss Mitigation Department" or "Workout Department" One should immediately call the Lender and ask for this department so that the process of obtaining a Workout Agreement may commence.
- Know the Foreclosure Sale Date. The date set by a Lender for a Foreclosure Sale should be the most important date on one's calendar. If one is not sure about if a date has been set or when that date is, pick up the phone call the lender or an attorney and find out! Know this date, and take the Actions described in this presentation prior to it to prevent and / or postpone it. If a foreclosure sale date is getting close (one month or less), one must at least ask the lender to postpone the sale or call an attorney. •Do not let the Foreclosure Sale Date arrive without having taken some sort of Action.
- Obtain a Checklist and Documents from the Lender. Find out what information the Lender will need to start the process. The documents that one will need to gather and the paperwork that one must fill out will vary from lender to lender. Be sure to write this information down or ask if a checklist can be sent by the Lender along with any required paperwork.
- Assemble Income Documentation. The first thing that the Lender will want to know is one's ability to pay back the loan if the Lender stops the default. It is important to remember that the lender may be willing to take into consideration sources of income other than one's own. Typically, one will have to send a financial statement (on a form provided by the lender), income documentation (pay stubs, W-2s, Social Security or Pension statements), and asset documentation. Gather the required documentation making sure to provide all of the proper documentation and to complete any paperwork required by the Lender carefully and correctly. Check these items off of the Checklist.
- Compose a Hardship Letter. The Lender will also want to know the reason for the default. This explanation, which comes in the form of a Hardship Letter, is one's opportunity to take Action, explaining to the Lender the reason for the difficulty in making payments. (Did your rate adjust? Was there a temporary loss of income?) The way one explains the reasons for the default is crucial to getting the lender to consider a Workout Agreement. Make a good case remembering that there are human beings making these decisions.
- Send & Verify Receipt of the Package. Once one has gathered and completed the necessary documentation, send the entire package to the Lender in the fastest manner possible and in a manner that provides a receipt. Use methods like Registered Mail or UPS, and call the Lender to verify receipt of the package.
- Follow-Up. And Follow-Up Again. Remember that there are a lot of people presently in default, and Lenders are very busy with requests for modifications. It is crucial to stay in touch with the Lender regarding the status of the workout agreement. Call the Lender as often as the Lender allows in order to maintain open lines of communication. The lender may ask for more detailed information. Provide that information quickly and accurately. Send it in the same manner as the original package and confirm its receipt. Follow up with the lender until they either offer an agreement in writing to stop foreclosure or indicate that they cannot make any offer.
- If You Like the Agreement, Sign It. If a Lender offers a Modification Agreement, make certain to understand entirely what the Lender is proposing. What are the Terms? What will ther new payment be? Is it affordable? For how long with that payment be fixed. If one understand all of the above, and the Modification Agreement is acceptable, obtain the Agreement in writing, sign it, and return it to the Lender as promptly as possible, verifying its receipt.
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This information has been brought to you by First Rockland Financial, a division of Domus Mortgage Services, Inc., a Registered Mortgage Broker with the State of New York Banking Department, with a great reputation for honesty and customer service. Headquartered in Rockland County, First Rockland Financial has the express mission of catering to the needs of existing and potential homeowners in Rockland County, NY. First Rockland Financial has been formed to leverage the existing industry knowledge and contacts of the Company along with the experience it has gained while arranging in excess of $400 million in residential mortgage purchase and refinance loans to assist Rockland County residents in obtaining the best financing possible.
Moreover, as a lifelong resident, I, Steve Odierno, the President of the Firm, take great pride in our County. As such, all at First Rockland have been given the mandate to do their share to ensure that our Firm becomes part of the housing industry's solution instead of exacerbating the housing industry's existing problems in Rockland County. So, if you live (or are planning to live) or work in the County, we hope that you will give us the opportunity to earn your business. Should you be interested in purchasing a new home or refinancing an existing one in Rockland County, please contact us at 1-866-403-6687 or visit us on the Web at http://www.firstrockland.com/.
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