HUD had announced a program that was to start on October 1, 2008, to help those homeowners who are (a) past due on their mortgages and/or (b) upside down (owe more on their home than it's worth). Without going into details, this program was to help keep people at risk of foreclosure in their homes.
The national training was held a couple of weeks ago in Atlanta. My partner attended. The training was on Thursday and Friday, all day each day. Mike, my partner, called at about 10:30 on the first day to tell me that he was leaving. He had asked some questions and found out that (a) at this point, it isn't a program that any investors are willing to do, (b) in its current form, the Wall Street securitizers aren't willing to purchase this loan as there are too many ways that fraud can be committted and (c) unless Congress passes additional legislation, this program won't ever bgin.
We have now gone back to find other ways to help those who called us for the H4H program. We had gotten applications on a large number of people but hadn't put them into process nor pulled their credit. We had to try to figure out options for these people, which we have and are still working on. However, it did cause me to try to figure out how homeowner's can be helped and I wanted to share.
A business associate that I did a conference call with last week, Jeff Misaud of fhasuccessdesk.com, told me about 'the Three Stages of a Foreclosure" that an owner goes through:
- Denial - most people avoid dealing with the fact that they are already late or that they won't be able to make their mortgage payment. If mail comes to them from their mortgage company, they lay it aside and never even open it. They think that if they avoid it, it will go away.
- Disgust - this is the phase when a large number of people start experiencing depression. In many cases of married people, fighting amongst themselves begins. Financial stress is probably one of the number one causes of divorce and it is at this point that the reality is starting to hit and people realize that they are going to literally lose the roof over their head.
- Destruction - many people who are being foreclosed upon cause damage to the house in retaliation of the foreclosure. We have seen holes punched in the walls, cabinets and fixtures removed, appliances taken, and in one case, someone took the entire stairs out of the interior of the house. There is nobody to blame for what has heppened so people blame their mortgage company and feel that in damaging the house, they are causing the mortgage company to have to pay out money, which evidently makes them feel better, at least temporarily.
The first thing a person needs to do when they realize that they can't make their mortgage company is to CALL THEIR SERVICER (the company to whom you make your payments). Now is NOT the time to avoid what is happening - you must be proactive not reactive. Keep in mind that your servicer does NOT want to take your home in most cases! If you ignore the problem, it will still be there and the best way to help yourself is to contact your servicer right away and explain what is happening. In a lot of cases, they will put you through to other individuals or organizations that may be able to help you.
If you are upside down and/or late on your mortgage, there are FREE housing counseling companies that may assist you. A list of these can be found at http://portal.hud.gov/portal/page?_pageid=73,1827662&_dad=portal&_schema=PORTAL. At this same webpage is a list of other ways to avoid foreclosure and keep your home. It is suggested that you contact one of these counselors and ask them to assist you (they are paid by the Government from money appropriated by Congress when they passed HR3221).
If you are finding it difficult to make your mortgage payment, you will need a new, tightened budget. Prioritize your bills and pay those most necessary for your family: food, utilities and shelter. Failing to pay any of your debts can seriously affect your credit rating, but if you stop making your mortgage payments you could lose your house.
A homeowner should know the statutes pertaining to foreclosure in their individual state. Contact an attorney, if necessary, and you may find that there are ways to either prolong or completely cancel a foreclosure action! This additional time will allow you, perhaps, to sell the house and avoid the foreclosure or, in extreme cases, to have the foreclosure overturned and never filed again. It's certainly worth the time, and in some cases, expense, of finding out. There are financial and legal services that are available to you to assist with these statutes. You can check out this webpage, http://www.hud.gov/local/fl/homeownership/foreclosure.cfm, for additional information on the statues, as well as your rights and/or resources available in any given state in the US.
Be extremely leary of foreclosure rescue companies. While there may be a large number of them that can and do help, we have found that, for the most part, a lot of these companies are scams and will have you out of even more money with no results.
If you have contacted your servicing company and aren't getting any results, and the housing counselors aren't able to help you, there are companies springing up that are known as loan modification companies. These companies, for a fee, will work with your investor/servicer to have either the rate on your current loan lowered, either termporarily or permanently, have the term (# of years/months of your mortgage) extended, and/or in more rare cases, forgive part of the debt to help lower your payment.
While there are some excellent loan modification companies, there are some unscrupulous ones who charge you high fees and don't do any work towards modifying your mortgage. It is very important that you screen these companies or get a referral from someone (we work with a highly reputable company that is getting great results for our clients). Don't use Google or the Yellow Pages to find one of these companies!
I know that having problems making your mortgage payment can take a toll on you, both physically and mentally. It's important that you be involved in trying to resolve this and, if you need assistance, you hire someone to help you that has proven results. This is your home we are talking about......not just a house!
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