More often than not, when we discuss the mortgage and real estate market we are talking to clients who are interested in buying a home, investing in real estate and making good solid decisions that will improve both their lives and their families. Our job as mortgage lenders is to minimize the risks that things go wrong down the road and families get loans for their situations. Our expertise as mortgage lenders is seeing what can or will happen, given enough information.
However, what if something unforeseen happens down the road? When getting a mortgage for somewhere between 15 and 30 years for someone, it’s challenging to see what lies ahead. Injury, illness, job loss, divorce and other horrible things happen to families all the time. It’s just the way it is. The problem though, is that when that happens who do you turn to. It’s a bit of a challenge and we may not have the answer but have some thoughts on where to look.
Here is a short list of people commonly looked to in these circumstances.
The current mortgage holder
The mortgage broker or loan officer
Realtor
Bankruptcy attorney
Loan Modification company
The government.
None of these options is very good as a solution. As detailed in this weeks video blog post, the current mortgage lender/holder is not a good option. In fact, they are often increasing monthly payments and loan balances in exchange for letting people stay in the home in the hopes that they “figure it out” and save the property from foreclosure. This is not a successful model.
Mortgage brokers have been driven from the space and are of little help unless they know a trustworthy lawyer to work on your behalf. Though knowledgeable about what a loan should look like given the new “changed” circumstances, they have been rendered powerless in a system where your bank controls the loan and may only respond to an attorney.
Realtors don’t have much of an answer either. They normally respond with a plan to sell the home. It’s what they do for a living and if you can get through the short sale process and get out from under the mortgage, they can help. This is of little value if you are interested in keeping your family in your home.
Bankruptcy attorneys have some answers as well. However, most of their answers likely involve filing bankruptcy. Aside from the stigma associated with this, most folks again are not interested in walking away from their home, just in getting some relief. Bankruptcy is like going nuclear. Once it’s done, there is long term fallout.
Loan Modifcations companies are shells for scams. Experience tells us that most, if not all are run by folks who were sub prime lenders and now are scamming the same people again. Don’t fall for it, get professional help. Hire an attorney.
The Government programs are useless as well. HAMP,and the like have over promised and under delivered. The big banks are not negotiating at all and thumbing their nose at the government while they do it. Contact your lender and pursue the government program if you like but it’s often a dead end. In fact, many stories exist of people being told by their lender that they were not qualified for aid until they missed two payments and then once the two payment were skipped were told the were not eligible because they missed two payments. Contacting the bank may be the worst thing that you can do. Good luck with that.
So what to do if you wish to keep your home but cannot afford your current payments? Research for starters. Find an attorney specializing in helping you keep your home. Not an expert in bankruptcy, short sale or deed in lieu. One of the challenges in discussing your problems with a professional service provider, is that they earn a living selling their service so they see your problems combined with their solution as the answer. If you meet with a Realtor, they will likely suggest selling. A BK attorney will likely suggest bankruptcy, etc.
Hopefully, you can get introduced to an attorney who is brave enough to stand in the face of the storm and fight to help you keep your home. More on that in our next post, which by the way, will be turned over to a guest columnist who is an expert in the foreclosure market. Taking our own advice on this one. See you next time.
