Help For Foreclosure Victims

Posted in Foreclosure Victims, January 16th, 2008 |

Foreclosures are rising and so are help agencies and workshops. The authorities are desperately looking for a way out of this impasse. Henry Paulson, the Secretary of U.S Treasury hinted that the federal government might add more features to its current programme to help foreclosure victims.

Paulson was addressing New York Society of Securities Analysts. He said that ‘after years of unsustainable price appreciation and lax lending practices’ it was inevitable that the house has to be now set to order. But even after heavy media focus and suggestions being given that ‘subprime’ should be taken as the word of the year, sub-prime loans continue to be active.

It is erroneous to think that sub-prime has vanished – it is till there, says Walton of a non-profit organization (Vallejo Neighbourhood Housing Services). The people still do not fully understand the implications of loans.

In Solano County there are 2,199 units that are delinquent, 889 waiting to be auctioned and 1,887 that have reverted to the bank. The official of Vacaville’s Housing Counseling Program has been individually advising the house owners. Last year 110 victims were helped to find out options during the pre-foreclosure stage. Not all could be helped.

The problem is that many mortgage companies will not talk until at least one payment has been missed. But by that time the situation is already grave. However counseling is available even before that critical point. But people usually seek help when it is too late and foreclosure has been filed.

Many options are placed before the clients – one being a reinstatement plan. By it the entire due amount (including late fees) is paid to the mortgage company to create an atmosphere of good understanding. Secondly there are repayment plans, loan modifications, restructuring, re-financing and forbearance options. These are for those borrowers who are going through a temporary period of personal loss. When even these doors are closed then the agency can help by arranging pre-foreclosure sales, short sales of deed-in-lieu foreclosure. By these the borrower can walk out without the black mark of foreclosure.

The city is proactive in its move to identify the sufferers through its website and by going through public notifications. Letters are sent out to the victims asking them to seek help from them. Initially the help messages were sent out too late but recently they have become more organized and timely help is forthcoming.