Mortgage lenders like Countrywide will reduce the principal on distressed mortgages if they believe it will prevent the account from entering foreclosure. Use this to your advantage when trying to make your mortgage more affordable. Negotiating your Countrywide mortgage to a lower rate may involve allowing payments to become late, damaging your credit rating, but may allow you to get a better deal on your mortgage.
Instructions
1. Gather all of your important financial documents to bring to your Countrywide loan officer. This includes payment stubs, bank records, bills and credit reports. If you require assistance preparing for the loan modification process, contact the Federal Home Affordable Modification Program through the link in the resources below. Call the telephone hot line for free advice.
2. Contact your Countrywide loan officer and tell him that you are having difficulties making your loan payments. Inquire about whether Countrywide would be willing to reduce your principal, interest rate or both. It may be particularly willing to negotiate with you if there are many foreclosures in your area, even if you yourself are not in danger of foreclosure and can comfortably make your current payments.
3. Consider contacting a nonprofit loan modification assistance company to assist in your negotiations. Some of these companies will take on only those mortgage holders who are in danger of entering foreclosure, but most will take on anyone who comes to them. Be wary of for-profit companies offering loan negotiation services. Some of these will charge exorbitant fees for a service that could be performed by a layman or through a free nonprofit service.
4. Wait until your mortgage payments become one to two months late, if you are willing to take a substantial hit to your credit rating in return for a stronger negotiating position for lowering your mortgage principal with Countrywide.
5. Send a letter of forbearance to your Countrywide lender if you are in imminent danger of entering foreclosure. Such a letter details your current financial situation and your plans to remedy it so that you will be able to become current with your mortgage payments again. If your plea is accepted, you may gain months of additional time to negotiate your mortgage and improve your financial situation.
