Contact your lender immediately
Don’t wait. If it is your intention to try to negotiate with your lender it always better to do it as soon as possible. Lenders will not deal with you if you wait for the end of the foreclosure process to finally explain your situation. Lenders want to know what has happened that has changed your financial situation and whether or not there is realistic chance of you being able to resume your obligations on the loan.
Personal meeting preferred
If your lender is local, it is usually worth the effort to set up a personal meeting. This will demonstrate that you are serious about saving your home and it will allow the lender to put a face to the file. Remember it is always harder to say no to a person that you have meet and liked. Also, remember to be respectful and if possible do not get overly emotional in these meetings. Instead, you want to explain fully the reasons for your nonpayment.
Make sure you are dealing with the actual lender.
Make sure you know if you are dealing with the lender or a loan service they have hired to collect delinquent payments. While a loan service might be able to deal with non-critical matters such as a late loan payment or two, they are rarely authorized to negotiate a comprehensive workout with you once the foreclosure process has started. For that you will want to go directly to your lender.
Don’t ignore the lender
Do not ignore their letters or calls. The lender is trying to determine the probability of your willingness to negotiate in good faith with them to stop the foreclosure process. A lender will assess in part your willingness to make things right again and the level of your determination, honesty and ability to resume your obligations under the loan. In this regard, respond to every communication, written or otherwise from your lender and be sure to keep a written record of the communication.
Know the facts and keep good records
It is critical that you be prepared to negotiate. You need to demonstrate to your lender that you are honest, organized, diligent and competent to negotiate a workout with them. Make a file and keep all of your house payment records, loan documents and written communication in one place. It may also be helpful to make a time line for your reference listing your payment (partial or full) dates and their amounts, events and important communications between you and your lender. You will also want to create a written log of every phone call you make with the lender including the specifics of whom you spoke with, the reason and the action takes that need to be taken by you or your lender as a result of the conversation.