Facing Foreclosure Many Homeowners at Mortgage Servicers' Mercy

August 14th, 2009 by Reed Allmand

Millions of homeowners are at least 60 days past due on their mortgages and facing imminent foreclosure; but they’re having a hard time taking advantage of mortgage modifications that could help them avoid foreclosure. The government’s Making Home Affordable program has experienced sub par involvement from mortgage servicers and only 9 percent of eligible borrowers facing foreclosure have been able to obtain mortgage modifications through the program.

Many homeowners facing foreclosure are frustrated and stymied by the mortgage modification process which often involves long waits, unreturned calls or even misinformation. But for homeowners who want to save their home from foreclosure, being informed and being persistent can pay off.

What you need to know:

Homeowners can qualify for the mortgage modification program if they are at risk of imminent default or foreclosure. For example, even if you are current on your mortgage, if you experience a financial hardship such as a job loss that will make it impossible to pay your mortgage in the future, you may be considered at risk of imminent default or foreclosure.

If your mortgage payment consumes more than 31 percent of your monthly gross income you may qualify for the mortgage modification program.

When you contact your mortgage servicer regarding the mortgage modification, you must have all of the required documents ready which include– tax returns, pay stubs and a letter describing why your mortgage is unaffordable, and what caused your income to fall or expenses to rise.

RESOURCES FOR HOMEOWNERS
www.makinghomeaffordable.gov – Information on government’s foreclosure prevention program.
www.hopenow.com –Counselors available to help distressed homeowners. Call toll-free 1-888-995-4673 to reach credit counselors to who can help you with options.
ACORN Housing –Call 214-823-4580 to find a housing counselor for free help.

About Reed Allmand

Website

Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

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  • http://twitter.com/ICGNYC @ICGNYC

    The most important thing to do if you cannot make your payment is to contact your lender immediately and speak with the loan modification department. Bring any proof of hardship and also an idea of what you can afford to pay each month. Decide if you need a few months to recover or just slightly lower payments. If your bank is unable to amend the terms of your mortgage, don't give up. Shop for another, maybe smaller bank that is willing to do a refinance and get you the rate and payments you can afford. All banks are different, with different rates and different positions on risk. If you can prove a source of income and bills paid on time, you may be able to save your home.

  • http://intensedebate.com/people/juliafishman juliafishman

    I thought I was going to lose my home because my bank wouldn't adjust my payments or rate or anything. I took my lawyer's advice and went to a few other banks and finally found one that would work with me (Intercontinental Capital Group in NYC). They're a direct lender so they had more flexibility and capital to work with. They got me a surprisingly good rate since my credit's not too hot and were easy to work with. Definitely don't give up if your bank won't help!

  • Jerry

    My wife and I have a house in Westchester and have been planning for a while on taking out cash from our home to help pay our daughter's student loans. But with the real estate market like this, we wound up getting appraised at way less than we thought. We went to ICG which we heard about from a friend and qualified for a low rate line of credit loan which is easy to pay off and we only need to take out from our house what we need. I think this is a good option for anyone in a sliding value market.

  • Jerry

    My wife and I have a house in Westchester and have been planning for a while on taking out cash from our home to help pay our daughter's student loans. But with the real estate market like this, we wound up getting appraised at way less than we thought. We went to ICG which we heard about from a friend and got a low rate line of credit loan. I think this is a really good option for anyone in a sliding value market.

  • Lisa

    I am a few months behind on my payments. My lender won't adjust my payments or rate or budge at all. I really don't want my house to be foreclosed, do you think it's too late to refinance with another bank?

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