I have been reading numerous articles in the last couple of months regarding the subprime market and foreclosures. I finally read an article this morning that has inspired me to blog. The article title, “Blacks suffer most in U.S. Foreclosure surge,” suggests that “blacks and Hispanics are more likely to get a high-cost, subprime mortgage when buying a home than whites.”
Even more alarming, the article also states that, “a proportion of blacks and Hispanics who received subprime loans even when their credit history was good enough to receive a cheaper loan.” And guess what… The U.S. Mortgage Banker’s Association said, “Disparities by race alone in home loans do not prove unlawful discrimination but may indicate a need for closer scrutiny.”
Being an advocate for human rights and anti-discrimination, I will be the first one in the picket line with you marching for our rights but that isn’t going to help your current situation. So, that is it. You are stuck with a high interest mortgage payment and you can’t make your payments. Here are the steps you can take to help you now!
1. CALL YOUR LENDER! Mortgage brokers are not in the business to foreclose on property. Do not wait to call. If you are three months behind on your payment and they have not heard from you, your lender will feel justified in pursuing a foreclosure.
2. Be ready to discuss your situation honestly and in detail.
There are many ways your lender might be able to help you. Each case in considered on an individual basis and will be treated differently.
DEBT COUNSELING -- Generally, the first way they will help is to look at all your outstanding debt to see if any of it can be restructured or consolidated. Mortgage payments are often the last payment a person will let slide, so when you start having trouble making your mortgage payments it is likely that you are experiencing difficulty with your other payments as well. Your lender can help you make a budget to structure a repayment plan.
REWORK (RECAST) THE MORTGAGE -- If you have some equity in your home it may be possible to rework your loan for an extended period of time to lower the monthly payments. The past due amount could be added into the new loan.
GRACE PERIOD -- If you are working with a lender, they will generally give you extra time to get your problem under control. Otherwise, if the lender has not heard from you, they will usually begin foreclosure when you are 3 months behind in your payments.
TRUST -- Depending on the individual circumstance and assets, your lender can work with you. It may be possible to place your assets in a Trust Account to protect them.
SIGN THE HOME OVER TO THE LENDER -- This would be considered a voluntary foreclosure and could damage your credit record the same as an involuntary foreclosure. However, you can avoid the public notice of a foreclosure sale. The lender will work with a real estate agent to complete the sale. You lose your home, but will not be held liable if the home sells below the debt amount.
BANKRUPTCY -- This is the last resort, if your home cannot be sold. It may save your home; however, it will severely damage your credit record for at least seven years and you will lose control of your finances. However, foreclosure proceedings are usually stopped until bankruptcy is resolved.
LAST RESORT…
CALL A REALTOR:
SELL YOUR HOME -- If your problem is serious enough that it can not be resolved in a reasonable amount of time, it may be necessary for you to sell the home and find one that is more manageable financially. It may be possible to sell the home and pay off both the mortgage balance and your delinquent debt, and thus avoid foreclosure.
Let your Realtor know of your situation. Your realtor will work closely with your lender to figure out the best way to get you out of this situation and back on track. It’s up to you though and the longer you wait, the harder it will be to get you to financial freedom!
Articles quoted:
“Blacks suffer most in U.S. foreclosure surge”
http://news.yahoo.com/s/nm/20070320/lf_nm/usa_subprime_race_dc
“How to prevent foreclosure on your home.”
http://www.ext.vt.edu/pubs/housing/nonumber/foreclose.html
