When I Miss a Mortgage Payment, Should I Call My Bank?

How will communicating with my mortgage lender help my situation?

We can’t say it enough – if you miss a payment – pick up the phone and talk with someone at your lending institution as soon as possible. People often wait until they’ve missed 2, 3 or more payments, paralyzed with anxiety, hoping their situation will magically improve. This is simply never, ever a good idea. Waiting until after you’ve received the notice of foreclosure simply narrows your options down to the point where you just can’t win.

Just what will communicating with your lender do? Well – don’t you need to talk to your spouse?Isn’t communication crucial to a good relationship? Of course it is. Good communication is probably the most crucial ingredient for good relationships, and make no mistake – you are in a relationship with the person who holds your mortgage. Just what can promoting a good relationship with your lender mean? Here are some advantages, and yes – many of them are psychological:

If a representative of the institution that holds your mortgage can put a face to you, and not only knows your name but knows your situation – you will receive much better treatment, and more importantly – more leniency and more consideration. You – and your situation – become more personal for the lender; they know what you look like, how many children you have, what your situation was when you bought your home, and what your situation is now. They will have a mental picture of what would happen to you if you lost your home, and this will predispose them in your favor.

The chances of a lender working with you to avoid a foreclosure go up exponentially the more you can show them that you are a responsible, reliable homeowner who is committed to paying what they owe – you’ve just hit a temporary snag in your finances. This is where they can – and often will, step in and help you trouble-shoot your situation, and look for answers and remedies to your situation.

If you don’t have much equity in your home, foreclosing on it is not in your lender’s best interests. In fact, it would be better for them if they didn’t foreclose, if you stayed in your home and worked to bring your mortgage current.

When you’re in financial straits, when you’re struggling to pay your mortgage and keep your home, wouldn’t it be better to have a positive relationship with the person who holds your mortgage? You’re in a stressful enough situation as it is – why add an antagonistic or unsympathetic banker or trustee into the mix? If you can, make your lender your friend. It will stand you in good stead in the long run.