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Having problem paying your mortgage? be proactive and avoid foreclosure

In Dutchess County New York, I was shocked to learn that weekly there are about 125 foreclosures; yes, many are losing the roof over their heads.

This post is not intended to dwell on the negative stuff in the market but hopefully it will help some to get out of a state of denial and be proactive about avoiding foreclosure.

Here are some reasons why people find themselves on the brink.

Adjustable rate mortgages which are now resetting to higher rates. In most cases the borrower was not really qualified for the loan in the first place.
Higher property taxes. With the rise in property values over the last few years, the municipalities carried out revaluation and consequently more people are facing higher taxes.
Financial devastation from high medical bills
Divorce
Loss of job
Cashing out home equity - that, as a result of lower home values, puts them in a negative equity position.

Here are some terms you should be familiar with:

Short Sale - This is when a lender will allow the property to be sold for less than the mortgaged amount; for example the mortgage amount was 350,000 and the bank accepted 250,000.
Debt Forgiveness - This relates to the difference between the mortgage and the sale price. Using the example above that would be $100,000. The mortgage company could give you a clean slate, or you could still be liable for the balance. There are also tax implications.
Summons of Complaint - Letter to borrower stating default status
Judgement - Claim against the property, for example for unpaid taxes.
Les pendens - pending litigation, possible foreclosure. If you try to buy such a property you could not get a clear title before the outstanding claim was satisfied.
Loss Mitigation - The loss mitigation department deals with foreclosures and tries to get as much money as possible (mitigate the loss) for the lender. This is the department you would talk to if you are behind on your payments.

This is a very stressful situation and can take a toll on a family. I know this doesn't offer much comfort but many in other counties and across the country are facing similar situations. This is not just happening to people owning a house for $100,000 but even those with homes costing over $1,000,000. Now that the damage has been done it has to be faced. Finding an alternative to a bankruptcy or foreclosure is a much better way to get out of a bad situation.

As a real estate agent, I love helping people find the home of their dreams but at the same time, if you have had a setback I am also here to lend a helping hand by directing you to professionals who have helped countless consumers avoid bankruptcy or foreclosure. The key to navigating this crisis is finding the people skilled in this area

The best thing you could do for yourself and family is to talk to someone. In a future post, I will be featuring one such local company that has been instrumental in helping many to avoid a foreclosure.

Jennifer Fivelsdal 845-758-6842

Posted by Jennifer Fivelsdal, Fishkill NY on 12/19/2007 08:10 PM

Comments (22)

dutchess county ny foreclosure, short sales, loss mitigation, real estate

Originally posted at: Rhinebeck Living: Having problem paying your mortgage? be proactive and avoid foreclosure

This post has been included in New York Information Dutchess County, NY Information
Post is included in group: I Love NY

22 Comments on Having problem paying your mortgage? be proactive and avoid foreclosure

DEC

2007

Lets hope that some of these banks will reset some of these loans so people don't have to go into foreclosure

Jennifer that is a lot of foreclosures per week. I am sure that some of these people can be helped but there will be many that will not have any other option but to go through foreclosure.

Jennifer, It's so sad to hear of the amount of homes but wonderful to know you are there to help these people in any way you can.

Jennifer, you give some great advice there. I have helped a couple of people through the short sale process and it was so gratifying to see them get out from under the situation they were in without having to take a foreclosure.

DEC

2007

Jennifer,

We're starting to see many foreclosed homes on the market. This week all the homes I showed are foreclosures...very sad!

Konnie - I think some banks will it sure beats going to forclosure.

George - Some people will not be able to avoid foreclosure, they are too far in the process. The point is,the earlier the situation is addressed the better change there is to avoid this.

Carole - The sad part is there are other counties and states that are worst off. This type of a problem is extremely stressful but at the same time it should be addressed early and to navigate this system the right team has to be in place.

Marchel -Extending a helping hand and coming up with a workable solution can be really rewarding.

Monika - It is very sad, the foreclosure will be noticeable across all price ranges. Sadly the lives of many will look differently in 2008.

Jennifer,
Great advice for your locals. I think banks will have to work with people, surely.

This is good information for homeowners to know. Establishing a line of communication with the lender could help to avoid foreclosure.

Cynthia - It make sense for the banks to work things out the clients, foreclosure is bad for both parties.

Derrick - That is correct and the sooner the line of communication is established there is a good change of a better resolution.

Jennifer... what a timely post. So many of our neighbors were not aware (or were and never thought it would happen to them) of what they were getting in to. Other just have to much pride to admit there is a problem. Thanks for showing people how to "save face" and possibly save the house too...

It seems some homeowners do not realize the importance of keeping current with real estate taxes. Taxes are just as important to pay as a mortgage. They need to understand they may lose their property if the are 2 or more years in arrears!

Thanks for sharing, Jennifer. Look forward to hearing about your local company. Also let us know if they have offices elsewhere in the nation!

Jennifer--very important message you bring to the table. Homeowners in trouble shouldn't underestimate the relationship they already have with their current lender. If they can see difficulties coming they should try to reach out and ask for early assistance. Banks don't want to own houses!

Jennifer, I felt very conflicted doing a blog with a similar theme on my website, but you are absolutely right- it's there, and it has to be addressed, and broken down for consumers that might be in that "denial" state. We can't make their payments, but we can offer outcomes that work for them- if they are aware.

Wish you a Merry Christmas and best wishes for a great year in 2008.

Tommy New York Certified Home Inspector Long Island NY

As one of the REO men in Jennifers area i see it daily. I do checks , bpo's on peoples homes at least 15 times a week for the major lenders and am getting assigned 3 homes a month. This past week I had to advise two homeowners that their homes were taken by foreclosure and that they needed to vacate by the end of the year. I hate doing this around Christmas but it is my job.

On the other side of my business I assist people with short sales and do loss mitigation. My experience as a former non performing mortgage purchaser for a private equity group during the last bank crisis gives me insight and contacts that others do not have. Helping is my way of giving back.

REO is not for everyone and neither are shorts. Homeowners should remember to never pay a fee for either a loss mitigator or a broker doing shorts until there are results! Homeowners should also check the realtors qualifications in loss mitigation or short sales. Most do not meet bank standards.

DEC

2007

Jennifer, What a sad situation for these families. You pasted valuable info here and i will look forward to your next post.

Ginger

Stephen - It is a tough situation but anyone in trouble should realise the sooner the issue is faced the outcome could be better.

Rosario - That is true and the IRS will find a way to collect even it means selling the property in a tax sale.

Mathew - I will be posting part 2 next Friday. I know it will be helpful to some people.

Jesse - Foreclosure is the worst option for both, early communication is key.

Laurie - This was not a topic I wanted to touch, however people need to know they have to act in a timely manner. If this post helped a few people to make the call, them I am glad I got over my hesitation.

Tommy - Thank you.

Jeffrey - You are right in the thick of things. It is not a pleasant job but it has to be addressed. I am glad you use your expertise to help people avoid foreclosure. Good deeds never go unnoticed.

Ginger - It is important that we pass on helpful information to the marketplace. I will post part 2 next Friday.

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