Mortgage Loan Servicing FAQs - Foreclosure


What happens when I miss paying my mortgage payment?
Charter Bank begins calling you on or after the 18th day of the month if we have not received your monthly mortgage payment. Our main purpose for the call is to find out if you have plans to mail it before the month ends. If we receive your payment before the month ends, your account does not get reported to the credit agencies. However, you will be assessed a late fee, which is equal to 4% or 5% of your monthly mortgage payment.

If we cannot reach you by phone, we will send you a letter asking you to contact us. Please do not ignore our letters or our phone calls. If we know you are having temporary financial problems, we might be able to offer some assistance early in the delinquency stage.
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Will Charter Bank accept a partial payment?
We can accept partial payments under certain situations. Call one of our collection counselors to discuss your options in greater detail. Together, with your counselor, you will need to review your financial situation and determine a proper course of action for you to follow to avoid delinquency.
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Can I not make a payment this month and add it to the balance of my loan?
Unfortunately, Charter Bank cannot extend the term of your loan, nor increase the principal balance. We are bound by the original terms of your mortgage note that was signed at the closing of your loan. In addition, we have investors that dictate what changes we can or cannot make to your loan balance. In some cases, we can allow a loan modification. See What are my alternatives or workout options?
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My income has been reduced. What should I do?
If you have experienced a temporary loss of employment or reduction in income, contact Charter Bank immediately. Explain your situation. We may be able to place you in a loss mitigation program until you are able to find employment or increase your income. We may ask you to provide financial information, such as your monthly income and expenses. Stay in your home for now. You may not qualify for assistance if you abandon your property.

If you have large credit card debt, you can contact a HUD-approved housing counseling agency. They have information on services and programs that could help you delay or reduce the amount you are required to pay on credit cards. These services are usually free of charge.

Do not ignore the letters or phone calls from Charter Bank. If we do not know your situation, we will have no other choice but to send your loan to an attorney to begin foreclosure action.
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What is a foreclosure?
This is the legal proceeding that Charter Bank can use to repossess your home. If Charter Bank forecloses upon your home, you must move out of your house. Your home will be sold on the steps of the county court house to the highest bidder. If the bid amount is less than the total amount you owe on your mortgage loan, Charter Bank could seek a deficiency judgment. If that happens, you not only lose your home, you also would owe Charter Bank an additional debt. A foreclosure or a deficiency judgment could seriously affect your ability to qualify for credit in the future. You should avoid them if at all possible!
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How quickly could my home go into foreclosure?
Each loan can be different depending on the specific circumstances of the loan type, investor, and borrower's situation. Typically, most loans will be referred to an attorney to foreclose when the payments are 120 days delinquent (four months late). Some loan types can go into foreclosure as quickly as 60 days delinquent (two months late).

Contact Charter Bank as soon as you have a problem paying your monthly mortgage payment. Charter Bank wants to help borrowers either keep their home or avoid the full foreclosure process. Foreclosure is expensive and investors like Fannie Mae, Freddie Mac, HUD/FHA, and VA require us to aggressively work with borrowers who are facing financial difficulties to help them keep their homes. We have several workout options available to help you keep your home or help you to avoid foreclosure.
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What if I have enough money to pay all the delinquent payments?
If we have not started foreclosure, you are only responsible for the late payments plus late fees. If we have started foreclosure, you are responsible for all attorney fees we have incurred. The legal fees can be very expensive and in some circumstances, be greater than the amount of the delinquent payments. To avoid unnecessary legal fees, call Charter Bank as soon as you realize you are in trouble. We might be able to qualify you for a workout option.
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What are my alternatives or workout options?
Your options include the following:

  • Repayment Plan. If you have sufficient income, Charter Bank may be able to arrange a repayment plan lasting eighteen months or less. During the term of the plan, you would make payments of an agreed upon amount that exceeds the amount of your monthly payment. As you make these payments, the excess funds will be held in suspense. Once there are enough funds in suspense, the funds can be applied to an additional monthly payment. At the end of the repayment term, you account should be current.
  • Special forbearance. Charter Bank may be able to provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently lost your job or source of income, or if you had an unexpected increase in living expenses. You must furnish financial information to Charter Bank to show that you would be able to pay the suspension amount in a lump sum or by paying on a repayment plan.
  • Mortgage modification. Under some circumstances, Charter can consider a loan modification. The modification typically increases the principal balance of the loan by the amount of delinquency, and extends the term of your mortgage loan. In some cases, the interest rate may be adjusted as well as the monthly payment amount. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem but your net income is less than it was before the default.
  • Pre-foreclosure sale. A pre-foreclosure sale enables you the homeowner to sell your property at a reduced sales price in order to complete the sale quickly. This will allow you to pay off your mortgage loan and avoid foreclosure and damage to your credit rating. You may qualify if you are experiencing financial difficulty and can no longer meet the monthly mortgage obligation, or if you have tried to sell the home, but the market value is below the payoff amount of your loan. Your loan must be at least 2 months delinquent prior to the pre-foreclosure sale closing date, the "as is" appraised value of the property is at least 70% of the amount you owe and the sales price is 95% of the appraised value, and you are able to sell your house within 3 to 5 months.
  • Deed-in-lieu of foreclosure. As a last resort, you may be able to voluntarily "give back" your property to Charter Bank. This won't save your house, but it will avoid the headaches and heartaches of a full foreclosure and possibly help your chances of getting another mortgage loan in the future. You can qualify if you are in default and don't qualify for any of the other options; your attempts at selling the house before foreclosure were unsuccessful (pre-foreclosure sale); and you don't have another mortgage in default.
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How do I know if I qualify for any of these alternatives?
Charter Bank can help you determine which, if any, of these options may meet your needs. We will require that you complete a financial worksheet (Financial Analysis Form) and provide copies of pay stubs, bank statements, IRS returns and other sources of income and expenses. Based on your income as compared to your expenses, we will discuss each option for which you can qualify. You should also discuss your situation with a HUD-approved housing counseling agency.

To begin this process, you may submit a Financial Analysis Form online.
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What can a Housing Counseling Agency do for me?
Housing Counseling Agencies can assist you with organizing your budget, prioritize your expenses and possibly negotiate with credit card agencies a new payment plan so that you can focus on your mortgage payments first. This will assist you in possibly keeping your home.

Some groups calling themselves "counseling agencies" may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself, for free, such as negotiating a new payment plan with Charter Bank, or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services call either Charter Bank or a HUD-approved housing counseling agency. Do this before you pay anyone or sign anything.
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What are other resources available to me on this topic?
For further information on how to avoid foreclosure:
For further information on consumer education on credit:
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The information contained in this FAQ is intended only as a guideline. Please contact us if you need more information relating to your mortgage loan.

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