Didn't Pay Your Mortgage?
By Michael Tingletary
When William Wein of Florida, broke his ankle while on vacation, he ended up missing work for
four months. The locomotive engineer and his wife, Denise, thought they could make ends meet
with his disability income. They were wrong. The disability payments didn't cover all their
bills, and soon they got one month behind on their mortgage.
Even knowing they couldn't pay their mortgage, the couple didn't call the home loan advisor.
It wasn't until a second month's payment was about to be late that they contacted the home loan
advisor. "I was just too embarrassed and ashamed," Denise Wein said. The Weins are typical of
many borrowers who fall behind on their mortgage payments and fail to call the home loan advisor.
In fact, 75 percent of delinquent borrowers take no effort to resolve the issue, according to a
newly released survey by Freddie Mac and Roper Public Affairs and Media. The survey is one of
the first comprehensive looks by Freddie Mac at why late-paying borrowers would risk losing
their homes rather than contacting the home loan advisor.
Here's what Freddie Mac and Roper found:
• Twenty-eight percent of survey respondents said there was no reason to talk with the home
loan advisor because they could not help them.
• Seven percent said they didn't call because they didn't have enough money to make payments.
• Other reasons for not calling included embarrassment (6 percent), fear (5 percent) or not
knowing whom to call (5 percent).
An overwhelming majority of survey respondents didn't know that there are actually a variety
of workout options that could help them avoid losing their homes.
About 30 percent to 40 percent of people never returned calls from the home loan advisor until
it got to the point of a foreclosure, said Ingrid Beckles, Freddie Mac's vice president of
default asset management.
"Just because you don't think there is hope doesn't mean there isn't," she said.
“Borrowers do have options”, Beckles said.
For example, you might be a candidate for forbearance, in which the home loan advisor will work
out for you to temporarily allow you to pay less than the full amount of your mortgage payment.
You may even pay nothing at all during the forbearance period if you are a victim such as those
from Hurricane Katrina who were granted forbearances.
A home loan advisor could work out a repayment plan. Typically you will receive a fixed amount
of time to repay the amount you are behind by combining a portion of what is past due with your
regular monthly payment. At the end of the repayment period, you have paid back the delinquent
amount.
In another option, your home loan advisor may work out a loan modification in which the original
terms of your mortgage are changed to help you get out of the arrears. For instance, the term of
your loan could be extended so that you have to pay less each month.
The home loan advisor will work out the best plan to meet your needs.
A 2004 Freddie Mac study found that the home loan advisor workout plans could lower the
probability of home loss by 80 percent among all borrowers and by 68 percent among
low-to-moderate income borrowers. For more detailed information about what options you may have
if you do fall behind on your mortgage, call Richard Bonomo, a home loan advisor. He saves
homes!
Perhaps you are so far behind that you can't catch up. But you know what? You will never know if
you don't pick up the telephone and call him.
"Don't hesitate to call because the longer you hesitate, the worse the situation will get," Wein
cautions. "Don't let fear and embarrassment take over and stop you. It almost stopped me. Any
effort you put forward to resolve a delinquency is more than worth it."
Here's what else the Weins realized: "The home loan advisor said the lender doesn't want my
house. They said, They want me in it". The End
Foreclosure 'Rescue' can be risky, and costly ….
Learn How to KEEP Your Home!
By John Sarrios
In danger of losing her home to foreclosure, Lynda Karstensen thought the solution
to her problems had arrived in the mailbox.
The letter promised she could fix her credit and save her home. She picked up the
phone - and ended up losing $750, and nearly losing her house.
Karstensen had turned to a foreclosure rescue firm, which buys houses at a discount from
homeowners at risk of foreclosure and then sells them at a profit, once the deed is signed over
to them. Foreclosure rescue firms lead homeowners into believing their home will be saved, but
that’s not what happens.
Complaints have been filed in the courts and are on the rise, in the last three years, against
foreclosure rescue firms. The list of unhappy homeowners are increasing, because there are
questionable transactions involving many foreclosure rescue firms. Greed keeps these
foreclosure rescue firms alive and growing. Beware!
Because of the overwhelming complaints filed in the bankruptcy courts against these foreclosure rescue
firms, courts are leaning toward protecting the homeowners. Many foreclosure rescue firms
agreed to stop doing business in a state after admitting to improper filing of bankruptcy cases.
The only problem is they will just go to another state until they are caught again. There are
enough homeowners to keep the foreclosure rescue firms in business and enough profit for them to
keep moving. A judge ordered a foreclosure rescue firm to return ownership of a house because
the paperwork was improperly prepared and there wasn't "fair consideration" for the deed
transfer under bankruptcy law. But can you believe there was no finding of fraud! Amazing!
Why aren't the courts considering this fraud? It’s just not right! Don't get caught up in this!
Caution should be taken with foreclosure rescue firms. Financially troubled homeowners need to
speak to an expert who specializes in saving homes, not buying homes. A highly recommended home
loan advisor who is straight as an arrow. Do work out a program to
keep you in your home. He is not looking to buy your home or sell it, his only goal is to
keep you in it. It is up to you to take this burden off you and see what!
Mortgage rates are continuing to rise and are pushing homeowners struggling to keep up with
these rising adjustable-rate and interest-only loans beyond their ability to make monthly
mortgage payments. Combined with hardships these homeowners would be better off having
a work out a program to keep them in their home than turning to a
foreclosure rescue firm. See if you qualify for Richard to
Save your home. And it’s Free to see if you pre-qualify. How could you not call, think about what is at stake.
Even homeowners who wait until the last minute could possibly get relief and stay in their home.
Why would anyone not do anything to save their home, protect their credit and equity?
Foreclosure rescue firms find potential clients by promising free rent and little cash, if any.
Foreclosure rescue firms will tell you that saving the possession of your home and keeping
the same neighbors totally outweighs whether your name will be on the deed or another company
will be on the deed, but what are the consequences of these actions? Once you sign over your
title to someone you no longer own the home but you do still owe the mortgage and you are
making rental payments to the foreclosure rescue firm. Scary isn't it!
Karstensen, received a letter from a foreclosure rescue firm. A "foreclosure specialist" with
the company said she could help Karstensen save her house. Karstensen signed on… eager for some
relief after being laid off from a call-center job and then suffering through an illness.
She paid the company $750 to design a custom program and "go to bat" for her with creditors.
The company agreed to work with her to prevent a scheduled foreclosure sale, according to a
complaint against the company that was part of her eventual bankruptcy case. Karstensen became
concerned when an appointment with a lawyer was canceled because it required a $500 fee she had
not been told she would have to pay, according to her complaint. She hired a lawyer to represent
her in the bankruptcy case. The foreclosure rescue firm eventually admitted in a court order
that it had improperly prepared bankruptcy petitions. A U.S. Bankruptcy Judge ordered the
foreclosure rescue firm to stop conducting business of any kind.
The Better Business Bureau issued a warning about the foreclosure rescue firm’s mail
solicitations. The same release warned homeowners about the risk of losing their homes to
companies offering help in avoiding foreclosure. The warning was posted on the BBB's Web site
about eight months after Karstensen filed for bankruptcy.
A lawsuit against a foreclosure rescue firm claimed an unspecified number of homeowners facing
foreclosure were pressured into signing over their homes. The homeowners claimed the
foreclosure rescue firm’s employees misrepresented details of their agreement. The company
promised but failed to get homeowners loans and they failed to tell them their houses would
be deeded to third parties. Wow, don't let this happen to you or someone you know.
Homeowners who need a financial life raft. There is no fee to see if you
pre-qualify for the program, but he will only take your case if he knows he can help you.
There is no risk on your part to call and hear how to save your home.
The End
Housing Risk Disaster!
Are rising interest rates strangling your pockets!
By Rod Serman
We all have tracked a dramatic rise in housing prices. This has placed tremendous pressure on
the budgets of many homeowners and created enormous financial vulnerabilities.
In the face of these conditions, homeowners have increasingly resorted to high-risk financial
means to purchase a home, such as adjusted-rate (ARM) and interest-only (I/O) mortgages, or a
combination thereof.
ARMs, like I/Os, are exactly what the names imply. They are mortgages whose interest rate
adjusts to the prevailing market level. Interest rates are on the rise which means monthly
mortgage payments are on the rise. ARMs are attractive to home buyers because, according to
Forbes.com, “since loan amounts are often dependent upon the ratio of your current income to
the cost of the loan’s first year of payments, an adjustable rate mortgage may mean a larger
total loan than a fixed rate mortgage.”
I/Os allow the borrower to pay only the interest on a mortgage for the first five to ten years,
thereby keeping monthly payments to a minimum. The problem with this type of mortgage is that
the borrower does not pay on the principal; if the house does not appreciate, the borrower does
not build up any equity. If home price falls, the borrower is still responsible for the original
amount of the loan.
A housing slowdown could trigger a slump in consumer spending because homeowners are relying
heavily on home equity loans to fund college educations, business start-ups, cars, home
improvements and furnishings, retirement and other purchases are typically purchased with
income, savings or other investments.”
With consumers relying heavily upon continued equity gains, even prices flattening could
squeeze them and, ultimately, the US economy.
Some market participants estimate that these higher risk ARMs are increasingly being
offered to borrowers seeking low—or no—documentation loans and to those with blemished
credit histories. While financially savvy borrowers using these products are more likely
to be prepared for the possibility that their monthly payments may jump sharply, marginal
borrowers may face greater difficulties adjusting as their monthly payments inevitably rise.
Homeowners who have bought homes with these “highly-creative” mortgage schemes will become—with
a decrease in home prices and a rise in interest rates—very susceptible to foreclosures. Over
the course of the past two years, interest rates have been steadily rising and so has
foreclosure and bankruptcy.
The recently enacted changes in US bankruptcy law, which went into effect on October 17, 2005,
increase the potential financial fallout from a future collapse of the housing bubble. The new
laws passed by Congress make it much more difficult to erase debts and is expected to force
thousands of people to enter into repayment plans that will leave them destitute for years.
If there is a significant fall in home values, it will force foreclosures upon millions of
people who will find themselves responsible for paying off the debt on homes they bought at
incredibly overblown prices, whose value no longer covers the amount of the initial loan.
Most commentators agree that we will see massive amounts of foreclosures if there is a drastic
drop in real-estate prices. The Federal Deposit Insurance Corporation (FDIC) has issued two
reports in the last year on precisely this issue. But they maintain that the market will not
collapse entirely, but rather go through a period of price stagnation that will continue until
wages are able to catch up to the level of home prices. However, real wages have either been
largely stagnating or declining over the past 30 years.
The FDIC is deeply concerned about the economic fallout associated with a collapse in the
housing market. The FDIC insures banking institutions, which in turn finance mortgages. If
there is a widespread default on the repayment of home loans, the FDIC could be brought to the
brink of insolvency. The possibility of such an outcome is by no means remote, as this is
similar to what happened during the savings and loan crisis of the 1980s. At that time, a
wave of defaults by savings and loans customers drove the institutions that held those debts
into bankruptcy, forcing the government body that insured those institutions, the Federal
Savings and Loan Insurance Corporation, to the brink of collapse.
There is help available to those looking to save their homes! Richard Bonomo, a home loan
advisor, is an expert at saving families homes. Call him and find out what he can do for you.
The call is free and he will let you know if you pre-qualify for his program. Save your credit,
equity and dignity! Don't lose out to bankruptcy and foreclosure when there are workout options
for you to stay in your home. The choice is yours! The End
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