Preventing Foreclosure...
Alternative Resolutions facilitates communication between lenders and borrowers for effective problem-solving
Why is it sometimes so difficult to get borrowers who are facing foreclosure to communicate with their lender before it’s too late? The reasons are many. Some mistakenly believe that there’s no need to raise the red flag until they reach the crisis point—things will get better and they’ll be able to catch up, so what’s the point? Others just don’t understand the process and don’t know there are options that lenders are willing to explore. Many are reluctant to reach out because not being able to pay their debts creates significant shame and embarrassment. The fear of being seen as stupid, lazy, incompetent or a failure, though generally unfounded, is very real for the borrower.
So how do you overcome these obstacles and get the communication started? The key is to have a process that can lay the groundwork for productive dialogue – one that feels safe, non-judgmental, and provides an opportunity for people to tell their story. One such process that has proved to be successful involves banks engaging an outside third-party facilitator to initiate the conversation with the borrower.
As facilitators, Alternative Resolutions has no stake in the outcome. We don’t advocate on behalf of the borrower or the lender, so we can be impartial. Borrowers are often more likely to respond to us because we are removed from the situation and can be objective. As facilitators, we can also help borrowers express their concerns appropriately and prepare for productive dialogue with their lender.
General Process steps:
1. Request made of Alternative Resolutions by lender to contact borrower when payments are missed or there is some other indicator that the borrower may be having difficulty; or borrower contacts Alternative Resolutions when they have a concern about their situation.
2. Alternative Resolutions has initial contact with borrower to:
A. Talk about their concerns and/or reservations about meeting with their lender.
B. Help them understand the purpose and benefits of working together with their lender to find mutually satisfactory resolutions.
C. Share information about foreclosure mediation, if appropriate.
D. Coach borrower to communicate effectively and to prepare for constructive problem-solving.
3. Arrange meeting between borrower and lender.
4. Additional coaching of borrower if necessary
Borrowers are often relieved to get their concerns on the table where they can be dealt with constructively. They come to understand that they are hardly the only customers with financial difficulties (why else would the lender have a program like this?) which can help to normalize the situation and make it easier to address. For many, it’s the first time they can believe that losing their job doesn’t have to mean losing their house. And even if they have the problem under control, the lines of communication have been opened in case they have a future need.
The sooner you can get borrowers talking to you about their financial difficulties, the more likely it is that you can find options that will keep them in their homes and your bank out of the real estate market. In most cases, appropriate intervention and preparation will create the collaborative problem-solving environment needed to do just that.
Call Karen or Cheryl today at 920-993-1490 to find out how to make this program work for you.
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