3 of 8 Most Common Mistakes Homeowners Make...And How To Avoid Them.

Real Estate Agent with HomeSmart Premier - Team Crumbz

MISTAKE #3: Thinking the lender will work with you to get you out of this mess.
Sometimes the lender offers you a way to delay your payments. It's called forbearance. They'll act like it's a reasonable solution. But guess what? It's never going to be reasonable or fair for YOU. It's only going to stall things for a little while, and put even more money in the bank's pocket.
You see, the way the bank works this in their favor is to tack on hundreds or thousands of dollars MORE to your monthly payment. After all, they want their money paid back and you've gotten behind in your payments.
This means your payment will be MUCH HIGHER than it was before. If you can't afford your payments now...how are you supposed to afford higher payments as a way to "help" you? If you decide to go with this kind of arrangement, you should insist they spell out in writing exactly what the new payments will be.
You must understand this...
Statistics show that approximately 85% of homeowners in Foreclosure do NOT make even the second payment with a forbearance plan.
The lender already knows the odds are AGAINST you with this arrangement right from the start, and your problem will be back more ferociously than before. But they want as much as they can get. You'll end up burning through every last penny you have, and STILL lose your home.
But that's not all... The bank may tell you that if you sign a document called a DEED IN LIEU, you won't have a Foreclosure on your record. This is probably one of the worst things you can do in your situation. Why? Because what they are really asking you to do is VOLUNTARILY FORECLOSE.
Don't be fooled by this seemingly harmless suggestion. Your credit report and personal record will clearly read DEED IN LIEU, a creditor's secret code for VOLUNTARY FORECLOSURE. This will NOT help you. It is strictly for the lender's benefit because it effectively eliminates the cost of them having to go after you with a formal Foreclosure proceeding. All is well and good for the bank, but YOU will still lose your home, PLUS your credit record will be permanently scarred.

And sadly, do not for an instant think the lender will care if you are disabled, ill, or have a house full of kids who need a roof over their heads. The unfortunate harsh reality is the lender owes it to their share holders, to focus on the bottom line and recouping their investment.
In most states, once the house goes into Foreclosure, the sheriff will show up at your home and order you and your family to vacate the property immediately.
The good news is, we are here to make sure this doesn't happen to you!


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Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

This reminds me of an article I read on Yahoo.  A couple completed a loan mod with their lender.  Their 800K house in CA was now only worth less than 500k.  The lender agreed to drop their interest rate to 1% for the next 5 years which made their payment very affordable.  That's great for the lender but is it great for the borrower?  In 5 years after they have dumped more money into this home will it be worth 800,000 again? likely the answer is no and the borrower will still own a property that has negative equity.  The loan mod was good for the lender but not the borrower!

Feb 16, 2009 03:45 AM #1
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Paul & N'Marie Crumbie, TeamCrumbz

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