Homeowners are currently experiencing some of the most difficult economic factors with the history of our country. These factors are causing many families into foreclosure at record paces. The most obvious problem they face is how to stop their foreclosure, but then they must also address their tarnished credit, a contracting mortgage market, their adjustable rate mortgage that is coming due and that mortgage pre-payment penalty most have.
It is growing more apparent that homeowners that were previously in foreclosure are actually reentering foreclosure because they did not properly address all five critical areas of correctly stopping the foreclosure. Homeowners for the most part are unaware of the guidelines because these are unfamiliar programs and they end up telling lenders what they think they want to hear. It's the lenders job to collect money; it is not their job to properly guide you to all the facts. Mortgage companies are not here to befriend you, they have a fiduciary responsibility to stockholders to collect money and pay dividends.
The profession of stopping foreclosure is loss mitigation. Since foreclosures are legal issues printed in local newspapers, fifty or more so called experts and attorneys will write to say that they can help or bankruptcy is the only way to save their home. Homeowners will typically find some interesting folks drawn to their 'foreclosure opportunity'. Forget that bankruptcies commonly fail and you now must qualify, all those so called experts, if they really can help, only stop the foreclosure process and don't address your whole problem.
If you were to break your foot, you go to a podiatrist. If you get sued, you retain an attorney. If you had a brain problem, you would seek out the best neurosurgeon that would take care of one of the most important parts of your body. Well correctly stopping the foreclosure process and retaining the largest financial investment most people have, is no different. Finding the right 'Loss Mitigation' expert is the same as working with other professions people commonly use. Skilled loss mitigation specialist will cover everything you may or may not have thought about during these trying times.
How Does A Contracting Mortgage Market Affect You? Since late 2006, over 110 mortgage lenders went out of business and another 60+ were acquired by larger mortgage companies. The problems are even larger than that. Just look at all problems on Wall Street with the companies that dealt with the subprime mortgage market. Billion dollar companies that are now considered worthless because of the subprime mortgage market. The point to this is simple. Subprime mortgages that help people with bad credit are a thing of the past. If you have a foreclosure process you are facing, no matter what credit you had at one time, now you are bad credit and nobody wants that mortgage. Only credit repair and years of consistent new and good credit will fax this. This is another reason that you must have your mortgage interest rate and term addressed at this time.
Why Is Your Credit Important? As just mentioned, no lender wants to offer mortgages to people with bad credit, regardless of the reasons for it. Mortgage companies are running scared. You need to be aware of the fact that your credit will be damaged for years.
You Have To Address Prepayment Penalties. Even if you found a lender that might offer you a mortgage, homeowners that have prepayment penalties are finding that a refinance will gobble up 5% of the loan balance. Homeowners that are facing a foreclosure have obviously experienced previous financial stress, a new lender will charge 3 to 5 points and paying that 5% prepayment penalty will consume a large chunk of your equity. Refinancing is definitely not the best option in most cases.
Stop The Foreclosure. Obviously, this must be addressed and 'how do we actually stop the foreclosure?'. Lenders may offer a solution directly to a home owner but it is designed with the banks best interest in mind and frequently requires borrowers to meet impossible underwriting guidelines. Typically they approve plans that are outside a home owner's budget. "The trick is to force the lender to approve a plan that is in the best interest of the home owner and their ability to pay their mortgage". Homeowners need to locate trustworthy representation. The majority of homeowners are able to solve their financial troubles in a relatively short time. They frequently can handle their bills but are $10,000 to $30,000 behind on their home loan and their lender won't take partial payments. Often times, they have saved some money from the nonpayment but still are losing their home. We find that if the hardship that caused the mortgage delinquency has been resolved and with a professionally designed plan of action, it is very possible for us to stop foreclosure.
Adjustable Rate Mortgage Are The Secret Killers After You Stop A Foreclosure. Wow, can we say anymore? The largest cause of the current foreclosure dilemma is adjustable rate mortgages that are coming due and they are adjusting. Not only are they are real problem but the also adjust annually so every year you will have to contend with, "Can I afford my home next year?" The continual stress is not good. High profile loss mitigation specialists will not only address this with the lender but they will also negotiate to lock you into a fixed rate mortgage, often at better mortgage rates than you had before!
"Typically, we discover that the banks policies differ from what the law allows for", said Scott Pasinski. Mortgage companies may offer to make a deal with you, but those deals favor themselves and they request more money than you can afford or more than they really will accept. Most people are new to the foreclosure process and they do not make their best case. It appears that many lenders take advantage of these homeowners that are unaware of the process."
The answer for the majority of homeowners is clear. The clear choice when confronted with a home foreclosure is to leverage the years of experience that a professional Loss Mitigation Specialist has. In addition, it is important to remember that this is the least stressful and most cost effective option. In fact, a good specialist will not charge for the first consultation, this will allow a homeowner the opportunity to see if they are candidates for the program. The vast understanding and skill set of a professional typically help homeowners out of foreclosure 98% off the time.
About the Author
Scott Pasinski has been a professional mortgage consultant for over eight years and specializes in locating the best mortgage program for a homeowner given their exact situation and he know all the ways to stop foreclosure. Scott also writes for Consumer Mortgage Reports.
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