Mortgage Holders Who Cannot Pay Need Not Despair
A foreclosure tsunami is raging over the country. The adjustable rate mortgages are spiking, jobs are vanishing, prices are rising and real estate is falling. All have combined to make it impossible for mortgage holders to continue with monthly payments. But they need not despair.
Housing experts and counselors have many suggestions up their sleeves. One can come to an understanding with the lender, credit counselors can be contacted, efforts can be made to sell the house, the bank can be given possession of the house or one can simply walk away without paying the mortgage dues. For a traumatized house owner facing foreclosure and eviction these suggestions are confusing – difficult to cut through the thicket of tips and advices. Some of the advice comes from unreliable dangerous sources. So the best is to keep cool and realize that this is not the end of the world.
The first thing is not to be an ostrich and bury problems below the sand but to face it. Letters and notices from the lender need to be opened promptly. Shutting down communication lines will only worsen matters. If lenders do not get any response from the borrowers then they are left with no alternative but to file foreclosures.
The lender is not the bogey as is usually made out to be. Given the present scenario they are far from keen to pursue the path of foreclosure. It is a time, money and energy consuming judicial process. While it is running the lender does not get any payments. At the end of it the lender is saddled with one of the countless units that are difficult to sell. Thus lenders are willing to negotiate – especially with those who have just started to lag behind in mortgage payments. The lender might lower the rate, extend the span of time of the loan or allow the borrower some time to catch up with the missed payments in installments. Mark Zandi of Moody’s Economy.com strongly urges that the borrower should contact the mortgage servicer without delay. Copies of all the correspondence should be carefully filed and kept.
Sometimes wonders do happen and lenders might be willing to negotiate even with those who are far behind in their payment schedules.
With mortgages mounting nothing can be predicted about what attitude the lenders will take. It is best to approach them with a positive plan and not just state that payments cannot be made.
