Foreclosure Help

The biggest casualty of the mortgage crises is the faith people had in the housing market.  Real estate agents would say that the housing market in California had only dipped once, and the recovery had been quick and strong.  This housing crisis doesn’t look like that.

Prices are dropping and no one knows what will stop them.  Lending has tightened up.  People who have mortgages might not qualify again, and even if they did, it might not be for the amount that they qualified for before.

The government talks about bailing out the banks.  Helping the banks help the borrowers.  Frankly, the banks are probably more concerned for saving themselves right now.  And the government certainly isn’t in the position to help every borrower that’s in trouble.

So what do you do?  First, if you bought a home and your value is dropping, sitting and waiting may be the best choice.  Whatever you do, you’ll need a roof over your head.  Think of your mortgage as rent.  And when the market starts to recover, values will begin appreciating again.  Although no one expects the kind of appreciation we had in the early 2000s, your equity in highly leveraged real estate increases faster than the value of the home.

If waiting isn’t an option due to payments or other things that have created a situation you can’t afford, call your lender, call your real estate agent, call your local helpline.  Do everything you can to get your lender’s attention.  Unfortunately, your contact is usually with the servicing company.  The servicing company actually makes more money when there are late charges.  They probably aren’t going to be interested in helping you and may not have the staff to do so.

Your biggest goal should be to renegotiate your loan into something you can afford.  There is no guaranteed path to travel to renegotiate your loan.  Try everything you can think of.  Contact your original mortgage broker or lender, but keep one thing in mind, none of these people have anything to gain except goodwill by helping you.  Contact government agencies (Acorn, Freddie Mac, Consumer Home Mortgage Info).  Contact your local helpline, your local news channel.  Now is the time to take action, you have your home on the line.

Your one guarantee is that if you do nothing, and don’t make your mortgage payments, your home will be foreclosed on.  Think about it, if you do nothing, you get the worst result.  If you try to solve the problem, make phone calls, etc, the worst thing that will happen is foreclosure.  You have nothing to lose by trying and a home to lose if you don’t.

Be aware, any time people are vulnerable, there will be scam artists trying to take advantage.  Don’t sign over your Deed of Trust and expect to get it back.  Don’t put down deposits or pay money to people who promise you results.  There is no promise when it comes to dealing with lenders.  Only perseverance, determination and luck.

© 2008 by Judy Kane