A Straight Talk on Debt

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The Mortgage Mess

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It’s almost impossible to read a newspaper or watch the news these days without hearing about the sub prime mortgage mess or how banks have had to take huge write downs because of homeowners defaulting on their mortgage. It really boils down to a bunch of people buying a home they couldn’t afford or using mortgages that the banks created to help people buy a home they couldn’t afford. Do you notice a trend? People bought homes they couldn’t afford, and then surprise, they started not being able to make their mortgage payments. In many instances the loans would go into default within the first three months.

 

Almost fifty percent of the homes purchased between 2003 and 2005 were financed with some type of Adjustable Rate Mortgage (ARM) where the loan has a low teaser rate for the first one to five years and then resets. Many of those loans have already reset, or are about to soon. If you find yourself in a situation where you are no longer able to afford your mortgage payment, try the following strategies to strengthen your finances and help manage your mortgage commitments.

 

Budgeting and Expenses

 

There’s an old saying that “Failing to plan is the same as planning to fail.” If you are unable to afford your mortgage payment, it’s time to slash unnecessary expenses and create a realistic and livable budget. Make sure you review your expenses and identify those that are necessary versus those that are not.

 

CONTACT YOUR LENDER!

 

Too many times I talk to people who don’t want to step up to the plate and contact their creditor or lender. I have been in a position where creditors were calling me about past due bills and I know it is difficult to admit your mistakes and pick up the phone. However, avoiding the problem will not make it go away. By dodging phone calls and collection letters, what will go away are the options you have to save your home. If you see yourself falling behind in your payments, don’t wait, contact the lender, after completing step 1, and explain to them what you can afford and inquire about what types of internal programs they have available.

 

 

Talk to a Professional

 

Home ownership is part of the American dream, and believe it or not, the government and the lender want you to stay in that home. In many cases, a person’s home is where most of their wealth is. Because of the current mortgage mess, government sponsored agencies have been set up to work directly with borrowers and lenders and programs have been created to help people keep their homes. Contact a Department of Housing and Urban Development (HUD) counselor at 800-569-4287 and learn more about your options. Another great resource is the Home Ownership Preservation Foundation (HOPE) which is an independent, non-profit organization that provides HUD approved housing counselors. Their number is 888-995-HOPE. If you have a Federal Housing Administration (FHA) insured loan, contact them at 888-297-8685.

 

 

If it sounds too good to be true, it probably is.

 

Unfortunately, situations like this can provide an environment for people and organizations that prey on individuals who are not educated about the foreclosure process and are desperate to do anything to save their home.  Protect yourself by learning more about the mortgage and foreclosure process.

  •  Avoid foreclosure prevention companies.
  •  Do not sign over a title or deed without first consulting with an attorney.
  •   Contact the better business bureau and your local attorney general.

 

To sum it up, the steps you need to follow if you are having trouble making your mortgage payments are: cut unnecessary expenses, talk to your lender, contact a professional, and beware of quick fixes and predatory lending.

 

 

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  • I'm in trouble like any other working being in america, I lost most of my steady jobs and I was falling behind in my payments , I got the nerve of contacting my bank and start a modification plan with them to my surprise some were really nice and some collectors were very rude but now we are in talks and in the proccess of modification....please do't wait until is too late,,,,,my savings are being calculated at around $800.00 dollars ....hope this stay that way until I can pay my morgage.....Don't wait work with your morgage company first....Jorge Garcia Buckeye Az.

  • We have tried a modification plan, etc. Our problem is that the company (Citimortgage) is so large I guess, the right hand doesn't know what the left hand is doing. Every time we call, we have to go over the same budet, the same info over and over. Then we wait. No one calls us back. We call them back and the roller coaster starts over again!  We aren't getting anywhere.

  • We have tried a modification plan, etc. Our problem is that the company (Citimortgage) is so large I guess, the right hand doesn't know what the left hand is doing. Every time we call, we have to go over the same budet, the same info over and over. Then we wait. No one calls us back. We call them back and the roller coaster starts over again!  We aren't getting anywhere.

  • Step 1 hits home with me, I didn't know how many canceled payments or how far behind I really was. I was afraid to face the music. So I went to the bank branch itself to talk face to face, and it wasn't as bad as I thought. The rep was very understanding, just remember, in this economy, they want to help and there are many of us. What I have learned is, it can't hurt to ask, what's the worst they can say?

  • I do not know if i should go bankrupt or do the care one program ....I may have to walk away from my house. I am on the deed but not the mortgage. i will need a place to live. With my debt being handled by care one, would i have a better chance at applying for a HUD loan or FHA or just forget it! Or should i go bankrupt and try to buy a house in a year or two.

  • Anyone out there with a Wachovia Mortgage...they will talk to you and work it out. In the beginning of this mess, it is true..no one knew who or what dept was doing what. You must send return receipt everything you write them. If you fax, take that copy and send it with a return receipt again. Cover yourself...Because when you call, they claim no one called them and that is your only proof! I have been in the house for over a year and I am still here trying to remodify!

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