Repayment Plan

What this option is

A repayment plan adds a portion of your past-due balance to each regular monthly payment until the arrears are cured. Your underlying loan terms do not change, which makes this the fastest and least document-intensive option when the shortfall is modest and your income has recovered.

How it works

1. 1

   The servicer divides your total arrears by the number of months in the plan and adds that amount to each regular payment.

2. 2

   Short-term plans typically run three to six months; extended plans may run twelve months or longer depending on investor rules.

3. 3

   You must sustain the higher combined payment for the entire plan term without interruption.

4. 4

   Successful completion cures the default and returns the loan to current status.

Eligibility considerations

These are the factors servicers weigh. They are considerations rather than a guarantee, and investor rules vary by loan type.

• Arrears are limited, commonly two to twelve payments depending on the investor.
• Income has recovered to a level that supports the regular payment plus the catch-up amount.
• The hardship that caused the default has resolved rather than continuing.
• No pending trustee sale that would conclude before the plan cures the default.

Required documents

Submit every page of every document. Incompleteness, not ineligibility, is the leading cause of denial.