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Mortgage Delinquency Rate Falling: More Problems Ahead?

[Aug 4, 2010.]


Investment analyst Laurie Goodman notes that although mortgage loan delinquencies are currently declining, there are likely to be further problems as homeowners continue struggling with making their mortgage payments. Based on Goodman's projections, it's likely that the U.S. will experience a future "hangover" of mortgage-related problems including foreclosures, stagnant home values, and ongoing mortgage defaults. Fannie Mae estimates that one out of seven U.S. home loans is delinquent, and has released a website targeting homeowners needing help.

Low mortgage rates = lower mortgage payments

Today's mortgage rates are assisting struggling homeowners with mortgage refinancing, or finding help through programs offered by by the U.S. government and mortgage lenders. The lower your mortgage rate, the lower your mortgage payments will be. When money is tight, lower mortgage payments can make the difference between making payments or risking foreclosure.

Mortgage problems? Finding the help you need

Before advising you how to get help, we'll tell you how not to: Avoid falling for scams offering mortgage assistance for a hefty fee paid in advance. There is nothing these services can do that you cannot do for yourself.

Knowing where you stand financially is important before contacting your mortgage company. Answering these questions will help your mortgage company representative determine how to help.

  • Can you afford to make payments, or must you sell your home?

  • What can you contribute today? Can you send one payment today? Two? (Be honest; say you can't pay anything if that's the case.)

  • What caused your financial hardship? Is it short term, or of long duration?

  • What is your monthly gross income (before taxes)?

When facing financial difficulties, answering your own questions is also important. Being honest with yourself and others concerning your hardship is how you'll find help. This may mean telling your kids that you have to cut back on certain activities and expenses. You'll have to find ways to cut back or generate more funds for meeting your mortgage and household expenses.

Drawing a line between discretionary and essential expenditures may be difficult, but can help with cutting expenses and promoting your financial recovery. Don't put off getting help if you need it. Delaying can increase the chances of losing your home.

If you're struggling with making your monthly payments or are under water on your mortgage, loan modifications and other foreclosure prevention options can help with keeping your home. Contact your mortgage company or a HUD approved housing counselor to learn about available options and program eligibility.

Many households are having financial problems; don't be embarrassed or defensive when telling your story. Taking notes during your discussions with your mortgage company and/or housing counselor can help avoid mistakes, misunderstandings, and confusion.


About Author:

Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.

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