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Loss Mitigation Overview | Preparation | Loss Mitigation | Filing Claims
CU HomeKeepers | Hardest Hit Programs | Loss Mitigation Webinar
Loan Modification and Other Home Preservation Strategies
Credit Unions should consider the home preservation strategy best suited to their Member’s individual circumstances.
Reinstatement & Repayment Plan
- Suitable for temporary crisis relief
- Credit Union typically designs the plan
- Revised payment schedule may stabilize borrower and bring the loan current
- Normally delegated
Forbearance or Trial Plan
- Suspend or reduce the payment for a defined period
- Credit Union should test the payment schedule
- Resume monthly payments and repay additional funds at a designated time
- Normally delegated
Loan Modification
Suitable for Members who can demonstrate stable income and a commitment to the home
Loan modification can occur with either loans that are still performing, with loans that have become delinquent, or loans that are at imminent risk of becoming delinquent. Essentially, it involves permanently altering the terms of the loan (such as rate, term or payment amounts) because of the homeowner’s hardship.
In working out a loan modification, CMG MI’s goal is to keep the member in the home. We approve nearly all appropriate loan modifications.
Visit our CU HomeKeepers page to learn more or contact your CMG MI Account Executive to coordinate your loan modification efforts with CMG MI. We should approve all loan modifications made on CMG MI-insured loans.
Modification of Current Loans
Even if your member continues to meet his or her payments, the loan may not be sustainable over the long term, especially if your member is facing money, employment or life event issues. You can help your member avoid delinquency by modifying the loan terms now – before the loan becomes delinquent.
Need to modify a current loan? Use our Instant Modification request form.
Modification of Delinquent or at-risk Loans
Loans become delinquent for a number of reasons. For delinquent loans or loans at imminent risk of delinquency, CMG MI’s focus is on helping you keep the member in the home. Preserving homeownership is the priority. Visit our CU HomeKeepers page to learn more about loan modification for these circumstances.
Types of Loan Modification
- Recapitalize – add delinquent interest to the existing loan balance
- Convert adjusted-rate mortgage to fixed-rate mortgage
- Reamortize by extending the number of months to repay mortgage
- On hybrids, try short-term forbearance and move to full modification if successful
Questions? Contact your CMG MI Account Executive.
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Important Notice: The National Credit Union Administration (NCUA) has issued a warning on the prevalence of loan modification/foreclosure rescue scams. The Financial Crimes Enforcement Network (FinCEN) has also posted several articles relating to this topic. Credit Unions should review the warning, the FinCEN articles and, if appropriate to the circumstances, legal counsel for the Credit Union, in order to be prepared to encounter potential fraud in their loss mitigation/loan modification efforts.
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CMG MI Understands the Comfort of Home
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