This is probably a very obvious statement, but if you are a distressed homeowner and are having trouble paying your mortgage, call your lender and let them know. The lender has a huge interest in keeping your home out of foreclosure also, as the typical foreclosure costs a bank $59,000.
So it is in the banks best interest to work out any issues that you may be having to keep the home out of foreclosure. Unfortunately though, more than half of the people who end up losing their home in foreclosure never contact the bank or lenders about their problems.
“Let the bank know as soon as you know your payment will be late. They adopt a very different attitude if they know the facts and (know) that the owner is not trying to skip out,” says Colleen Hernandez, executive director for the Homeownership Preservation Foundation, which provides free counseling.
Calls to her foundation’s 24-hour hotline have shot up 61 percent since January. Difficult cases are referred to credit counselors affiliated with NeighborWorks America, a nonprofit organization. The organization works with counselors in all 50 states (www.nw.org).
“There is a huge myth out there that financial institutions want to take the property back, that that is their real intention,” says Marietta Rodriguez, interim director of the NeighborWorks Center for Foreclosure Solutions.
In fact, foreclosing on a home, then reselling it, costs a lender almost $59,000 on average, according to Freddie Mac. via the Lansing State Journal
Many people have gotten into homes and loans that they will not be able to afford in the past few years. But the odds of the deck are not stacked against you as much as you would think. Like most things in life, be proactive and meet the challenges head on. Odds are the situation is not nearly as bad as you think, and you are not the first to have to fight these battles.
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{ 5 comments… read them below or add one }
GMAC is my mortgage company and they are not willing to help. They were contacted when I first lost my job and they told me that there was nothing they could do until we were going into foreclosure. If we kept struggling to pay the mortgage there was no relief, no working with you, no help. If you are now in behind and facing foreclosure and working with a counselor they either want you to sell the home or face foreclosure.
They stressed that foreclosure was a lifetime problem and we should only pay the mortgage and let all other bills lapse.
What exactly is the results of foreclosure? Should we pay the mortgage only? Aren’t we as worse off credit wise if we don’t pay the other bills?
What is the next step? What are other people doing after foreclosure? Living on the street? In tents? Most people have lost their jobs, what is the best plan?
Are we just working with the collections part of the mortgage company? What happened to OUR money we lent to them? Is there really a stimulus act for housing?
Please help.
Our mortgage company is Wachovia/Wells Fargo. I went to them beginning in October of 2008 and after some six months of letters, backup info, phone calls , etc. we did not get any help at all. We wonder if we should just stop making our payments and let the whole mess take it's course. All we want is for some relief on our payments by a lower rate, a baloon at the end or something. We are going to run out of money and then it won't be a question, either short sale or foreclosure. But the bank won't do anything.
I'm in the same situation with Well fargo. After months of sending them information, faxes twice a week to keep things current, and countless phone calls from them requesting more information, they say they cant help. They recommend short sale because it benefits them not you. They sent me a letter saying I did not supply them with current documentation. The girl I spoke with today says she needed me to re-submit all my paperwork again. I told her she has recieved my last payment and hung up on her. It is total harrasment. They drive you to your breaking point then say they cant help. I'm done!
Concur, I spoke with a terrific young man who told me quire candidly today that there is nothing that Wells Fargo can or will do for me despite my sterling credit rating and past payment history. My California home is so underwater that it is toxic and so i believe i will collect rent on it until my number is up and deal with the tax implications and the rebuilding of my credit when the time comes. I was very up front about that and he affirmed my strategy as one human being to another and wished me luck. Stop imagining that the banks care about "helping you" and take fight fire with fire. They had their bailout and are back in the black. It's time we bailed ourselves out. Thanks Bush, nice job!
My bank is BofA they got one of the largest bailouts of all. I have tried everything. I spent hundreds of dollars faxing them paper work for over a year. Then I tried there modification program and for almost a year and a half they told me we were gonna qualify. And then one day I got a letter that said “SORRY” you don’t qualify. I am a small business owner and I have paid a ton of taxes over the years. And now I’m just fed up with it all the government and the banks. I think we need to let them both go broke and they can see what it is like in the real world. When I was in high school I once told a teacher that all teachers should have to work in the real world for 5-10 years before being able to become a teacher. I think the same should apply for are politicians.