Jeff, Great Post and information for homeowners. I think lenders should give a document similar to this post to everyone that applies for a home loan.

Jeff, if you reach even one person with this, it's worth it.  Great piece!

I have a question for you: another AR member posted a couple of days ago about chargebacks and how they are the worst thing to have on your credit history. I asked for clarification from him about degree of severity: Foreclosures, Bankruptcy, Chargebacks but did not hear back. What, in your opinion, is the order of magnitude?

Thanks!

You are right the "f" word is something that we are hearing all to often these days. It is enough to make any homeowner a little concerned.

A lot of this is going around. Interest rates are adjusting and homeowners that address these issues asap have a better chance of getting out from under.

Jeff,  Great tip don't avoid the problem.  I have seen many lenders give people a deferment just to help people out.  Communication is the key

Mana.....  that is a very good idea. Something to think about when I even hand out applications.  Things just happen. Thanks for the compliment.

Irene......  well, one is good, but a few more would be even better. But thanks. Awareness and education is two key things here. Thanks for the polite words.

In regards to your questions.....charge backs?  Do you mean charge offs?  Foreclosures are going to be your worst. Ch. 7 2nd worst and then Ch. 13.   Charge offs and collection accounts are bad, but each one of these also depends on what you are trying to accomplish. But foreclosures are looked upon as the worst thing to have on your credit. It also shows that you didn't seek help.   

Christopher.....   and even more concerned if they know they are going to get behind. But when they don't take any actions when they know, this is even more of a problem. And it will just get worse.

Lori.....  yes, interest rates are adjusting and my fear is that many people will use this as an excuse... and possibly just let their property slide, because so many others are doing this.  Thanks for stopping by.

Matt....   so true and it's so easy just to ignore the initial issue, hoping that it will go away. And you are so right in regards to communication. 

Jeff, I did mean charge-offs. I think the post I saw, however, mentioned charge backs. (Not surprising as he said chargebacks were the worst thing that could happen to one's credit.) Thanks for the clarification! 

This is great advise Jeff, and I think it's "right on time" for many!!  Agreed when you say call the lender ASAP!   Every lender has a loss mitigation department and the LAST THING THEY WANT IT ANOTHER HOUSE BACK! They are ALL loaded with files as it is.

Take Jeff's advise and CALL YOUR LENDERS!

Jeff, This is such great advice especially now!  We can not stress enough that ignoring the problem will not make it go away!  As you may know from my post, I was in this situation years ago. It can be devastating but sometimes there is a solution!  This is a 5!

This is great information.  And what happens if the lender won't work with the client? then what do you recommend?  I've got a client like this and I'm probably not going to be able to help them.

Irene.... I am not perfect nor god, but for anyone to say charge backs?  And that these are the worst?  Not sure why this person couldn't say foreclosure, because that is the worse and you can tell by all lenders guidelines when mentioning foreclosures and bankruptcies. my pleasure.

Katrina..... you are correct, every lender has a loss mitigation department. I wrote about this about 5 months ago. Thanks for the compliment.

Kim..... ignoring problems happen often, no matter what the problem is. And yes, I remember your post and I could only imagine. Thanks

Kate....  What would I recommend?  My opinion?  Call a bankruptcy attorney if all else fails. If they can save the house and get them back on their feet, great. It can and has happened before.  thanks for the compliment.

Jeff,

Your touching on a very important subject, right now thats all I hear is foreclosures everywhere, you are helping many with this info...

I think it's great,

Tom Weiss

Some excellent advice here, Jeff.  Thanks for another great post.

Jeff,  I think this information will help many people.  They don't know what to do so they don't address the problem, making it worse.  This tells them there is help out there and I hope many people see it!

Excellent advice, Jeff. CALL your lender sooner rather than later.

Tom W. ......  Just wondering how much worse it will become and how this will affect investors, scaring them or shutting them down.  Thanks for the comment.

Marlene.... thank you very much for the compliments.

Carole.....  I hope people read this or at least come across it. Thanks for your input.

Missy.....    yes, don't wait. And I have received calls from people asking for help, to refinance, but when going into their 3rd month of non-payments. Thanks for the compliment.

Thanks for the link again =) I think I'm going to send it full circle and add your link to mine too. This is good information to help people get out of their troubles.

Your advice couldn't be more timely! Good post!

Great advice on the "professional mitagators", avoid them! They typically charge clients $ 1,500 (up front) and do what the client or agent could do for free. They have impressive webites and success stories. I think copy writers must write their references. Good post, DavidC

Lisa..... my pleasure.....   hopefully this will help some of those that are having difficulty and don't know where to turn too.

Joan....  I hope so, thanks....

David.... professional mitigators?  ;o)   What's sad is the segment that I saw on 60 minutes. Especially those that signed their deed over to someone who promised them that they could help. NO... STOP... don't do this. You don't own the home anymore. I saw people get thrown out and their belongings thrown in a dumpster. SAD.  thanks for the compliment.

Good advice, Jeff, but not every borrower should avoid foreclosure.

For many, it makes sense to simply let go of the anchor rather than letting it drag them to the bottom. Identifying those people and advising them to walk away while they still can is important.

All of the new services "selling" public records certainly does not help out either.

Great information Jeff, The bulk of the adjustable rate resets are still in front of us (October-February).  As such, there will be an unprecidented need for prudent advice.  Did you see the sharp increase in the 30 yr jumbo rate quotes today?  It's frightening.  I am praying for the Fed to come out Tuesday with at least a bias towards lowering interest rates.   Best,  Bob

Hi Jeff,

You are full of great information, THANK YOU!  Now I have to sit down and real all your blogs.

Great post Jeff, I just hope that the one's who need to see this find it before it's too late.  Thanks for putting this out there, one person can make a difference!!

Robert.....  thanks, but why do you say that not every borrower should avoid foreclosure?  That is part of the problem that we are running into now. People are taking that advice that you have mentioned. They aren't taking responsibility for home ownership, no matter what has happened. Sure, it ends up on their credit, but this will affect so many others.  

Overall, I disagree to identify these people unless they speak to a lawyer to see what their options are. In my opinion, you need to look into this no matter what. People think it's easy to get a mortgage after this happens also. It use to be semi easy, but it will be a lot harder now.  thanks for your input. 

Paul & Michelle.......  no, this doesn't help. But as long as you understand your rights, nobody can take anything from you until it goes to sheriffs sale. You just need to communicate with your lender or talk to a lawyer.

Lorinda.....   thank you very much for that comment. And yes, please sit down and read any of my blogs that you would like.  ;o)  

Brad......   I hope so also. I guess time will tell. Thanks for those polite compliments.

Jeff,

Thanks for the post. Great information and very to the point. As a Loss Mitigation Specialist, I see the number one problem is denial. Time and time again, the borrower just can't accept the fact that they are in this predicament and worse yet, there's no plan or willingness to plan because of the denial, until the eleventh hour.

I negotiated a short sale when we already had a buyer in contract..the seller owed 14K we got them down to $450 for an outstanding water bill...we closed and both of us got paid...the seller was spending up until the end. They never will be able to purchase again for a long time. It turns out they bought the home as a HUD home and didn't realize some of their debt was from the previous owner..such as their large water bill.

Great information Thanks

Jeff - this is really good information for homeowners who are finding themselves in trouble. Unfortunately once they finally see something like this they are often too far down the road.  Do you mind if I link to this from my relocataion blog?

Jeff

I agee with Jeff above.  Great info., but as the market changes over the next several months there will be less and less options for these people. 

Perhaps we need to focus on BOTH prevention and recovery type info.  Can we just admit that this is so bad that quite a few people in theis predicament will simply have to start all over???  How do we help them???  Not sure I have the best answer, but only takling about how to stay out of foreclosure is a bit like the fire department handing out prevention pamphlets at the scene of an inferno!

Great information Jeff.  Did you know that South Florida was declared and the "Foreclosure Capital of the World" as per the tabloids?  We need to educated our public as preventive measures.  Thanks for sharing.

John - I agree with you on that one. I think a huge hurdle is getting folks to accept the situation they may be facing and deal with it accordingly, instead of continuing to think things will get better. They need to know more about the options they might have.

And I think lenders need to be willing to provide more guidance and assistance so they can work together, if possilble, top avoid foreclopsure. They also need to be more proactive regarding short sales and getting these properties sold, instead of allowing them to go to foreclosure. I have seen a number of situations here where there were multiple good offers and the banks just did not seem to do anything iin the short sale process and the sellers had no choice but to be foreclosed. Seems like the more expensive way to go to me. But maybe I am missing something.

Jeff

Great info & tips Jeff.  Communication is vastly under-rated.  Worthy of the star, people need to read this!

Jeff...until the banks are overwhelmed like back in the 90's, they won't respond favorably.  Right now, they are managing, and are getting close to market value, so they aren't desperate enough to care - yet.

Jeff,

I am always happy to see a real estate professional posting informative information. Many of my clients left my  office in tears after finding out they should not have signed over the deeds to their homes to these scam artists who promise to help them, but are only out to make quick money. 

Terry 

Interesting comments.  I'm not anti-attorney but once a Lis Pendens or Notice of Default is filed, the mortgagor is bombarded with mail.  An easy 30 to 40% of those mailings are from attorneys.  Just because a person has a law degree doesn't make that person the best choice for the homeowner facing foreclosure. 

A yound lady I know is being persuaded by a bankruptcy attorney to file bankruptcy - he has her convninced she will be able to walk away from the debt and the house without repercussion or deficiency judgment.  That couldn't be further from the truth.

As professional Realtors, there is a lot that we can do for these homeowners that are facing financial crisis.  The current foreclosure rate is creating a whole new arena in real estate that is different than we've ever seen in this industry. 

Lenders aren't the culprit - correction, lenders aren't the ONLY culprit.

Excellent post on this topic. For a lot of people this is a real issue and a frightening one at that.

William.....   I think denial is # 1 with a lot of different circumstances out there. And you hit the nail on the head, no plan or willingness. Thanks for your feedback.

Neil.....  sounds sad. But define not buying for a long time.  With an FHA mortgage, you can get a mortgage 3 years after the sale of the house that went into foreclosure. This is just long enough time to get back on your feet, save money, and get your credit re-established. Thanks for your feedback.

JR......  thanks for the compliment and for stopping by.

Jeff D. ....... I agree that many are too far down the road when finally coming across something as this.

And no, I do not mind if you link to this. I never have any problem with anyone linking any of my blogs as long as I get the recognition for them. Thanks for asking and for the kind words. 

John C. ......  I agree, there could be less options. But just knowing that you are in trouble, able to admit it, and seek help is the key. As William C. mentioned, the willingness. Recovery and prevention are good topics. Some of the tips in here are prevention, at least I would think. And I am already writing a post on recovery and those options.  Thanks for your feedback and those polite words.

Michelle......  I know Florida and I think Ohio is up there are in a bad situation. There are a few reasons why this has happened more so in some states than others. But in Ohio, I have no idea. Thanks for the compliment.

Jeff D. ....... short sales is a whole different topic that I am not to much up to date on. But I agree, there needs to be better awareness and prevention on the lenders side also. At least people to work with these individuals that are facing these types of difficulties. But let's not fool ourselves, it still takes the owner of this property to be accountable for what has happened....but most of all, as we have stated, to step up and admit that they need help and not just think things will get better.

Jason S. .......  that is so true, communication. And that goes for both the consumer and the lender. Thanks for compliments.

John C. ......   I think many care, I think it goes back to training thought, from within these lenders. Meaning....  customer service is too strict and not forgiving sometimes. Everyone needs to come together to a certain point. Not that these people should be let go from their obligation, but that they are more educated on their options.

Terry......  that has to be the worse. When I saw that 60 minutes episode, I was pissed. I know greed is such a dangerous thing at times, but to just walk in, deceive the homeowner like that, and take away their home..... DAMN.... but they are going after these people because it is illegal. We just need more public awareness for these people. Hey, great idea....   maybe lenders can send a quick letter to those that are a few months behind and outlining this example and what to look for. Or does the lender care, because they will have the client out of foreclosure if this does happen this way.

Wendy.... I do agree, they need to be very careful in regards to what lawyers that they seek out. I have heard some lawyers that talk people into bankruptcy when they actually didn't need to go that route. But in all honesty, this can happen to anyone from any industry. Just like their are loan officers and realtors that give bad or wrong advice just to make a buck. Thanks for your feedback and for your input.

Bob & Carolin.....  yes, it is frightening. Thanks for those kind words and for stopping by.

I would add "Speak to a Qualified Realtor" as an option for someone facing foreclosure also.  My wife is a specialist and about 50 to 60% of the people we work with are in some stage of the foreclosure process.  Most of the time we can provide options to help someone out of their situation, unfortunately in most cases once someone goes behind it is very difficult for them to catch up and maintain payments.  The right Realtor can provide options without the expense of an attorney and in many cases (like ours) that Realtor has attorneys that will work at a discounted rate due to the volume they recommend.

Alex and Cadey

Robert.....  thanks, but why do you say that not every borrower should avoid foreclosure?  That is part of the problem that we are running into now. People are taking that advice that you have mentioned. They aren't taking responsibility for home ownership, no matter what has happened. Sure, it ends up on their credit, but this will affect so many others. 

Hi Jeff.

It's not just their credit at risk, itr's their entire future. Some people are in up to their necks or deeper. They simply cannot pay all their bills. They're using retirement funds and credit cards to pay their mortgage and taxes. That's insanity!

Those people (and I know two people doing just that) need to look at the numbers, accept that they cannot afford the house, call the bank and walk away before the house bleeds them dry.

Great post Jeff. So many people just clam up because of pride or fear of the unknown. As has been said above, if you reach one person and have encouraged them to make the call you will have done them a great service.

Nick

with the times we are currently facing this is a very good piece of informaiton - I hope this helps a lot of people that are afraid of this topic

Alex & Cadey.....  I know that there are some qualified realtors out there for those facing foreclosures. But in all honesty, what can make them different than a lawyer? Or in fact, to point the client to a lawyer?  I understand that you have built some good relationships with a few lawyers, but whose to say that sometimes these relationships aren't the best.  And just curious, why would a realtor go out of their way to give options to a client if they aren't charging anything upfront as a lawyer does. I am not implying anything, just asking on the curious level.  thanks for your input.

Robert..... I understand this. But just walking away can have a great impact without getting advice sometimes. I just don't believe that you run and hide per se. Get some advice first, no matter what situation that you are in. In my opinion, with people reading this, you are giving them the impression just to do so, which many have. And it can affect everyone else in the home buying process. Just too many variables.  But again, thanks for your input.

Nick...... that is a big part of it, pride and fear. And then what happens is when they do seek help, but it's too late. I just think everyone needs more education and awareness when it comes to this. As a few have mentioned, possibly a little booklet explaining some things that I outlined, that is given to them at closing. ???   Thanks for the compliment.

Thesa.....   I also hope it helps, because I am sure that it can be devastating when someone faces these situations. Thanks for the kind words.

Hi! Just in case you didn't see it. Your post was featured in Active Rain's Week in Review 7/29/07-8/5/07, written by Desiree Daniels. Congratulations!

Great information Jeff  - AS USUAL. Thank you very much.

Jeff great information.  Right now with the market as it is.. I don't think there is too much information to share about foreclosure. Check out The rankings are in from the top 20.  No plug just additional information on the top 20 cities on the foreclosure stats.

wow, great thread

Great post, I was actually asked to speak on avoiding foreclosure next week at a civic association meeting by one of my referral partners.  I am going to use some of this info in my talk.

John Thomas - Citizens Lending Group - http://DelawareMortgageLoans.net

Finally, some practical advice on avoiding foreclosure. Great info...There can't be too many warnings about those out there waiting to take advantage.  I'd like to share a link to more advice

http://www.howtodothings.com/finance-real-estate/how-to-stop-foreclosure-now