What do I do when I'm falling behind on Mortgage Payments and selling isn't feasible?

by nancy woodward

There are so many homeowners in this position today. They find themselves owing more to their lender(s) than the current market value of their home. As Real Estate values decline this occurence is becoming more common. Many families with multiple mortgages are realizing they can't sell their home and break even today.

I believe all lenders really don't want your home. They want you to continue making interest payments for the next thirty years. The lender makes money by receiving your continuing payments - the interest portion of your payment is the lenders income stream.

Lenders actually rework 90% of loans for their good customers who are experiencing problems meeting their obligation. They have more than one option which will help you stay in your home.

1. Partial Reinstatement - you agree to continue making your payment as usual and makeup the balance overdue in the next year.

2. Short-term Forebearance - You skip a number of payments or reduce your payment for a few months - then make up the difference in a set period of time.

3. Long-term Forebearance - Payments discontinue for a longer period of time (usually more than twelve months) then you begin to repay all.

4. Loan modification - Your payment is permantely changed. This could be a rate change, time extension or a combination so you can continue making your payments.

5. Other terms - the bank has the flexiblity to combine and or modify whatever it takes to reduce your payment to an acceptable level.

Call your lender when you realize you will be having a problem meeting your obligations. You need to ask for the correct department - don't speak with collections. Their job is to collect money, not modify loan terms.

Most lenders have experienced these problems over and over in the past year. They will be willing to talk to you.

The Government Intervenes in the Mortgage Loan Problem as Mortgage woes continue to plague us

by Nancy Woodward

The government, aka Bush, has created an agreement to freeze interest rates. But, this option is only available for those with certain sub-prime mortgages and will only continue for five years. The reason for this is hopefully reduce the number of foreclosures coming in the near future. The number of foreclosures continues to rise dramatically.

Credit is no longer easy for borrower’s to obtain. In Pennsylvania one third of the number of mortgage banks have closed this year. In New Jersey the decline has been less but still it’s an impressive 22% decline.

This decline is just the icing on the cake – there is also a decline in employment related to the closings. Of course, the snow ball effect begins - less jobs, less spending, therefore less jobs and so on.

So, the governments plan will help but it definitely won’t cure the Foreclosure problems we are experiencing and will continue on into the foreseeable future.

Foreclosures in Tucson

by Nancy Woodward

Thousands in Tucson face the possibility of losing their homes. The Tanner family fell behind in the mortgage on their home in the Northwest side of Tucson. Thousands of homeowners face this predicament.

Already more than 5,000 homes have gone into foreclosure during the first nine months of this year. that is double the number of foreclosures for this area last year according to RealtyTrac.

The problem prevails all over the area. It happens for various reasons such as job loss, increase in mortgage payments, divorce and more.

Many of these homes can't be put on the market since they are now worth less than the going rate for similar homes. This problem is increasing the inventory of unsold and vacant homes in the area.

Current Real Estate and Mortgage Financing Status

By Nancy Woodward

Financing is becoming more of an effort these days. Lenders are scrutinizing all loans closely. All loans includes investor loans, as well as, homeowner loans. As an investor, I suggest you talk to your mortgage lender and test the waters.

Did you know that you can move some of your investments into an LLC which will remove them from your credit report? Since lenders penalize you for having more than ten properties, consider moving them into an LLC. You will find it easier to obtain financing.

In a time of declining values you must know if your investment is in an area considered declining values. You certainly would not want to purchase any property in these areas today. You can find a report – The House Price Index – at http://www.ofheo.gov

As normal, do your due diligence prior to investing in anything.