Facing Foreclosure – 3 Smart Moves
written by: Leslie J West
Historicly high foreclosure rates were caused by lack of controls on the lending institutions. Easy qualification of buyers and outright mortgage fraud engaged in greedy brokers undermined our financial lenders. Billions of dollars lent to high risk borrowers. All these loans were bundled together and securitized. The financial securities were bought by institutional investors, IRA retirement plans and even foreign investors. Homeowners who were qualified under optimist and unrealist criteria soon found they could not make the payments on their mortgage. Default notices were sent after a delinquent loan payment or two remained unpaid. Collection efforts were made until a decision was made to foreclose the loan. Attorneys representing the lenders sent hundreds and thousands of these foreclosure notices a month. Homes were sold at auction and the homeowners were foreced to move if they had not already moved on. Some of these homes sold at auction but most were retained by the lenders. These REOs represented poor lending practices and the FDIC rules came into play. Large reserves of capital had to be set aside as holding and management costs, as well as, costs to liquidate the asset. Naturally, many large firms failed and investors holding these securities lost huge amounts of equity. Our economy was dealt a financial blow that sent shock waves throughout the worlds financial markets. A homeowner in financial distress and feeling pressured by the bank should open communication with them. You should personally contact the lender by phone, fax, email or direct mail as soon as possible. Your lender must know what the problem is and how they can help resolve the problem. Many options are available in the early days of default. Absolutely, do not hide or avoid speaking with the bank. First, consult a professional. You may want to discuss this matter with an attorney. Other sources of help are foreclosure experts and others who are qualified in this area. Get all the advice you can. Do not hire anyone yet as your lender will be upset with you if repayment of your loan is not first considered. Second, by all means seek out help from any organization with means to help with your finances or management of your finances. Debt restructuring and asset protection can be obtained with experts and individuals willing to help. Simply tell your story with details of what you can do or not do. Important information you must provide is when you can provide funds, how much money, what terms and conditions you need as well as, other considerations. Get as much flexibility as possible for future renegotiation after your current situation is stabilized. Ask for more time to consider your options. Third, after considering your situation and all the information presented amkea decision of what you can do. Make a written plan describing all the tasks to be enacted. Schedule meetings with each party to the plan present your plan and get an agreement on something. Keep detailed records of the meeting and followup with a letter to recite the decisions made. Keep your emotions reined in and be objective even though these problems are very personal to you. Do not be fearful it is counterproductive. Ask for more time. Your situation will improve with time. Keep in contact with your supportive friends and others offering help. Keep active and avoid analysis paralysis. Keep looking for additional options to help keep your home and family secure.
These three steps are the beginning and may be adequate, but if you are still unable to keep your bills paid you will want to look for other methods. Homeowners who have the loss of a primary or a second income will have to seek more severe choices which may include the sale of their primary residence and uprooting of the family.
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