“Overdue Borrowers Reluctant to Ask for Help”
Six months ago clients came to me, asking for some advice. They told me they had gotten behind on their mortgage and didn’t know what to do. I asked them if they had contacted the servicer, they answered no. They told me, they didn’t know what to say. I asked them if they had attempted to get a modification done, they said yes, but where denied. I asked why they said, they didn’t know. I asked them why they didn’t reapply, they were not aware they could.
My advice to them was simple, they immediately needed to contact the servicer and immediately reapply for the modification. They did just what I advised. Two weeks ago, they closed on the modification. Their interest rate when from 6.75% to 4% and all of their back payments were added to the end of the loan. Their monthly payment was reduced by $450.
The moral of the story, communicate as soon as there is a problem, actually before there is a problem.
Overdue Owners Still Reluctant to Ask for Help
By:Amilda Dymi
Only 26% of the 1,019 homeowners surveyed by Money Management International in April said they would first seek help from their lender.
Housing counseling or mortgage relief programs rank last at 13%.
And a top reason why borrowers continue to be intimidated by the prospect of facing their lender-servicers is fear they will be taken advantage of.
At 50%, the largest percentage of the respondents would first seek help from family or friends indicating that despite certain progress in reaching out to distressed homeowners, more efficient efforts appear to be necessary.
An astonishing 63% of those who sought help did so when one to three months behind on their mortgage payments, while 22% did so when they were four to six months behind, while 4% were seven or more months behind before they sought help.
Survey participants expressed concern about the resources and options for mortgage assistance available. Scams and fraudulent services topped the list for 53% of those surveyed, followed by fear that assistance cost would be unaffordable at 51%.
Another concern that has been a staple for the mortgage industry for decades is a borrower’s ability to understand the mortgage lending process. At 45%, almost half find the process confusing and are afraid they would choose “a solution they did not fully understand.”
One’s financial wellbeing plays a crucial role. Up to 57% of the survey participants said they would seek help only after a job loss, 35% if they knew they would miss at least one mortgage payment and 27% if they already had missed one mortgage payment.
The national nonprofit that since 1958 has been providing full-service credit-counseling and debt management assistance by appointment in its branch offices and 24/7 by telephone and Internet said the goal was to inquire “how homeowners would act if they were struggling with mortgage payments.”
These concerns are real and worth considering, said Jo Kerstetter, MMI’s vice president of education and community relations, since millions of homeowners still face possible foreclosure and need to be aware of the fact that free, quality help is available from HUD-certified housing counselors nationwide.
image: renjith krishnan/freedigitalphotos.net
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