| Many homeowners would be able to afford their | | | | given an answer to their application. If the borrowers |
| mortgages if not for a temporary financial hardship or | | | | can not make that call everyday, the should seriously |
| an inopportune interest rate reset. They are not facing | | | | consider paying someone else to do it on their behalf. |
| a serious long term change in their income, but were | | | | Another, more speculative, option is for homeowners |
| only temporarily unable to make a payment. Interest | | | | to default on their loan completely and hope that the |
| rate resets on adjustable rate mortgages may be | | | | bank sells their mortgage to the government. The |
| even more unfortunate, as it is clear so many | | | | government will probably step in and negotiate the |
| borrowers did not understand and were not made | | | | balance down and reduce the borrowers' monthly |
| aware of the fact that the cost of the mortgage | | | | payment before selling the loan back to some other |
| would drastically increase a few years after they | | | | bank to collect the payments. Wall Street banks are |
| bought their home. | | | | being bailed out for hundreds of billions of dollars of |
| For families in this situation, it would seem easy enough | | | | foreclosure victims' money -- homeowners behind in |
| to identify the goal that would allow them to keep their | | | | payments might as well get in line to get a piece of |
| home; namely, they must lower their monthly mortgage | | | | their own money to save their homes. |
| payment. Of course, this is much easier said than done, | | | | Finally, as one last option to lower monthly payments |
| but there are a number of routes that borrowers can | | | | dramatically, homeowners can try to fight the |
| take to try and obtain a more affordable payment, | | | | foreclosure in court for as long as they can get away |
| even if they have bad credit or they have recently | | | | with. It may take years for the legal process to be |
| changed jobs. While using a foreclosure lender is a | | | | over, if borrowers answer the initial complaint and |
| viable option, in times of a credit crunch and lower | | | | demand that the bank show proof that it can |
| property values, it may be wise to consider other | | | | foreclose on the house and has been in compliance |
| solutions first. | | | | with all the applicable laws. There are so many |
| Before they try anything else, all homeowners should | | | | regulations that banks will have violated some clause in |
| call their lender and ask the loss mitigation department | | | | a state or federal law, or lost the original mortgage |
| what is needed to qualify for a mortgage modification. | | | | note. In any case, some homeowners have lived |
| Borrowers will probably have to send in a number of | | | | mortgage free for nearly a decade while they file |
| financial documents and fill out bank forms proving | | | | motions in court, wait for hearings, and file appeals at |
| they can make a reasonable payment every month. | | | | every step of the process. Even if they lose the |
| This solution may significantly lower the payments but | | | | house in the end, they will have a long period of time in |
| will typically not lower the total amount owed on the | | | | which to save money and pay down other debt. |
| loan, as a modification is usually just about reducing the | | | | Families who experience a temporary setback in their |
| interest rate in order to make the monthly cost more | | | | income may find it almost impossible to get back on |
| affordable. | | | | top of their mortgage payments, with little help offered |
| Borrowers may also want to consider the use of a | | | | from the mortgage company itself. The banks make it |
| foreclosure help company to do the services listed | | | | difficult to do so, as they begin accelerating fees and |
| above. If they do not have the time to spend on hold | | | | interest in an attempt to eat up as much equity from a |
| with the bank for hours a day, then they might want to | | | | house as possible, if it goes to a foreclosure sheriff |
| unload this part of the process to professionals. The | | | | sale. But homeowners do have options to lower their |
| owners can do pretty much everything else to qualify | | | | payment, either through modification of the loan, a |
| for a workout solution on their own, but banks currently | | | | potential government bailout, or fighting the lender in |
| have so many foreclosure cases that they need to be | | | | court, not to mention refinancing with a specialized |
| called almost everyday until the homeowners are | | | | foreclosure lender. |