Talking to Your Lender Early: Scripts for Claremont Owners

The hardest call a homeowner ever makes is the first one. It is also, almost always, the one that keeps the most doors open.

Silence does not buy time. It closes options. A servicer that has heard nothing from you assumes nothing is coming, and the file moves along a track that was designed for people who never called. A servicer that has heard from you early has, at minimum, a reason to look at alternatives before that track hardens.

Before you call, get free help on your side

Start with a HUD-approved housing counselor. This is not a formality and it is not an upsell. HUD-approved counseling agencies are free to the homeowner, they are trained on the specific loss-mitigation programs your servicer actually offers, and they have no financial interest in which outcome you choose. You can find an approved agency through the U.S. Department of Housing and Urban Development or by calling the national housing counseling hotline.

A counselor will help you build the picture your servicer is going to ask for anyway: what you owe, what comes in, what goes out, and what changed. Walking into the conversation with that already assembled changes the tone of it entirely.

Please read this next line slowly. NOBODY SHOULD EVER CHARGE YOU AN UPFRONT FEE to talk to your lender, to negotiate a modification, or to arrange a short sale. Not a consultant, not a rescue service, not a company that found you through a public filing. Legitimate housing counseling is free. A real estate agent in a short sale is paid out of the closing, if a closing happens, and not before. If someone asks you for money in advance to save your home, walk away and tell your counselor about the approach.

What you are actually asking for

People often call their servicer with a vague plea and hang up with a vague answer. It helps to know the names of the things you might be asking about, even if you are not sure yet which one fits.

You might be asking about reinstatement, which means catching up the arrears in a lump sum. About a repayment plan, which spreads the arrears over future payments. About forbearance, which pauses or reduces payments for a period and then has to end somewhere. About a loan modification, which changes the terms of the loan itself. Or about the exit options, which include selling the house on the open market if there is equity, and a short sale if there is not.

Which of those is right depends on facts you may not have measured yet. Before assuming you are underwater, work through whether the mortgage really exceeds what the home would sell for. Claremont values have moved a great deal over the years, and some owners who are certain they are short are not. An ordinary sale, when it is available, is simpler and more within your control than any of the alternatives.

A script for the first call

You do not need to perform. You need to be clear and be on the record.

Opening. My name is [name], my loan number is [number], and I am calling because I am having trouble making my payment. I want to understand my options before I fall further behind. Can you connect me with your loss mitigation or home retention department?

The facts. Give the shape of the hardship in two or three sentences. A job ended. Hours were cut. There has been a medical event. A marriage is ending. A co-borrower died. You are not making a case for sympathy, you are establishing a category, because servicers evaluate hardship by category. Do not exaggerate and do not minimize.

The ask. What loss mitigation options is this loan eligible for? Is this loan owned by the investor you service for, or held in portfolio? What documents do you need from me, and where do I send them?

The close. Can I have your name and a reference number for this call? What is the next step and by what date should I expect to hear from you?

Write down the answers, the date, the time, and the name. Keep every letter. This record matters later, and it matters most if something goes wrong.

What to expect back

A single point of contact is common on delinquent files, and having one is worth asking for. Expect to be sent a package of forms. Expect the request for documents to be repetitive, and expect to send some of them more than once. Frustrating, yes. It is also normal, and it is not a signal that you are being singled out.

Expect, too, that the person on the phone cannot approve anything. Servicers administer loans on behalf of investors and insurers, and the decision authority usually sits somewhere behind them. Understanding who actually approves a short sale and why makes the pace of the process far less baffling, whichever direction your file eventually takes.

Say what you do not know

You are allowed to say I do not know yet. You are allowed to say I need to speak with a counselor and an attorney before I commit to anything. What you should not do is agree on a call to a plan you have not seen in writing, sign a document you have not read, or make a payment arrangement you already know you cannot keep. A broken arrangement is worse than an honest no.

Two professionals belong in this conversation and are not on the phone with your servicer. A CPA or tax professional should look at any consequence involving forgiven debt, because tax treatment turns on details of your loan and your circumstances that only a professional reviewing your return can assess. A real estate attorney should look at anything you are asked to sign, and at any question about liability after the loan ends. Nothing in an article can substitute for either.

The calm version of urgency

Early is better than late, but early is not the same as rushed. Take the week you need to gather documents. Take the counselor appointment. Take the second opinion. What you cannot afford is months of unopened mail.

If the outcome you land on is a sale, understand the shape of it before you start: the step-by-step path of a Claremont short sale is longer and less predictable than a normal listing, and knowing that in advance is half of surviving it. If the outcome is a modification or a reinstatement you can genuinely sustain, that is often the better result, and a good advisor will tell you so plainly.

No one can promise you an approval, a timeline, or a particular outcome, and you should be wary of anyone who does. What you can have is an accurate picture and an early start.

For the full set of options and how they compare, see the Claremont short sales guide, and if you are weighing the harder path against the alternative, read short sale versus foreclosure before you decide anything.

Anthony Grynchal has been licensed in California since November 2009.