What is the AHP homeowner outreach efforts process?

Published on April 25th, 2017 by

Typically, letters are forwarded to borrowers providing the three options: settlement, modification, or cash incentive to cooperate with deed in lieu or short sale. Each of the options has the actual numbers that are approved for the particular borrower, i.e. settlement amount, new modified payment and reduced principal balance amounts, and cash incentive. These are based on formulas derived from the property value and existing loan terms, and are typically attractive to borrowers as we share some of our acquisition discount with them. These letters are sent every 30 days, and our servicer also makes phone calls. We do not require any documentation from the borrowers in order to proceed with any of these options, so any of the options can be in effect within a few days once borrower says go.

 

If the borrower does not respond within the first 30-days, we will continue or initiate foreclosure. This is often a long process, and the goal of the action is to provoke a response from homeowners who in many cases have not paid on the mortgages in years. In many cases, borrowers will not react until the foreclosure sale is just days away. We will work with borrowers who wait, including some who do not talk to us until even after the sale has occurred. However, the best deal we offer is in the first letter as we have not incurred legal expenses yet. If borrowers wait, the numbers will still be attractive but not as much as the first offer, because we need to account for the additional time and costs.

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