Your mortgage loan: beware foreclosure "help"

[Apr 20, 2010.]

 

The subprime mortgage loan crisis demonstrates what happens when people are offered mortgage loans that are "too good to be true." Many borrowers took mortgage loans they couldn't understand or couldn't afford or both. Statistics suggest that mortgage loans are at their highest risk of foreclosure during the first two to three years. Borrowers also risk foreclosure when their circumstances change and they can no longer afford to make mortgage payments. Here are some tips for avoiding problems and finding genuine sources of help.

Mortgage loans in distress: foreclosures are public record

Once a mortgage lender files documents citing its intention to foreclose your mortgage loan, your home loan problems become a matter of public record. Scam artists are well aware of this, and spend time accessing public records for new foreclosure filings. This is why you should never accept unsolicited offers of foreclosure help unless the offer comes directly from your mortgage servicing company.

Finding mortgage help: contact your mortgage company first

Your mortgage company can direct you to foreclosure avoidance programs based on your circumstances. Contact your mortgage company and ask to speak with their loss mitigation department. Before calling, have the following information handy:

• Your mortgage loan account number: You can find this on your payment booklet or statement.


• The reason why you need help: Be ready to explain why you can no longer make payments. Unemployment, illness and reduction in income are examples. State the facts calmly and avoid making excuses or being defensive.


• Your current gross monthly income: This is your income before taxes and other deductions pro-rated to a monthly basis. Include income for all borrowers.


• Your current monthly obligations: These may include utilities, child care, insurance, groceries, home maintenance, medical, personal care, credit cards, and education expenses, Estimate and total these amounts; your mortgage company will request an itemized financial statement later.


• What you want to accomplish: Can you afford to stay in your home and resume making payments, or must you sell your home? This information assists your lender with identifying potential options.

If you cannot get help through your mortgage company, please contact a HUD-approved housing counselor. These services typically work on a non-profit basis and can help with contacting your mortgage company and arranging mortgage help appropriate to your needs and ability to pay.

Avoid Mortgage Loan Fraud Schemes: Don't Pay Up Front

Never pay anyone for lists of mortgage "experts," fees for attending "mortgage help seminars" or other offers received via the mail and media. Taking charge of your mortgage loan problems will help you avoid mortgage fraud that worsens your financial situation.

 

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.