Blog with SFHDC
Nearing Foreclosure? What are your options?
February 22 2010 | RSSIt is important to know what options you might have if you can no longer pay your mortgage. More importantly, arm yourself with useful information, and rid yourself of information that has no affect on your ability to successfully reconcile the matter. If you are current on your loan; have expenses greater then your present income, a hardship that is unresolved, or simply owe more than the value of your home, but can pay—you more than likely need to do some homework before your lender can potentially assist you.
When you signed the promissory note on your home loan, you agreed to make monthly payments without default regardless of job loss or economic hardship. The issuer does not have any express obligation to assist you. He/she’s responsibility is to act in the best interests of the investors that now owns your mortgage; this is the issuer’s primary allegiance. Put yourself in an investor’s shoes. The investor calculates whether to offer assistance to you based on the amount of money they stand to lose if they deny your loan application. When you spend more money than you make, and are asking for assistance, you will typically need to show more income. How you do this is up to you, and there are no easy answers.
This is what I usually tell clients who are in this scenario, and is current on their loan, “Well, true you don’t have a job now, but you are current on your loan. I know that this is not easy to hear but your issuer, acting as a risk assessor, can probably only offer assistance to clients whose hardships have passed, and are able to show a balanced budget. Now the common timeframe for foreclosure in California is approximately 6-9 months from the first missed payment. So let’s look at this scenario – maybe, you start missing payment next month, and as uncomfortable as that is, we’ve already discussed how your issuer and your investor(s) view the situation – you may need to miss payment to show a risk of loss to the investor on your note. Let’s say you miss 4 months of payment before you find work sufficient to fix your monthly budget deficit. If you can do this before a sale date of the home is scheduled through foreclosure, you will be well within the timeframe for consideration for assistance. When you are able to show a balanced budget, you would have successfully demonstrated that, if you are offered assistance, you’ll be able to get back on your feet.”
Frankly, it matters less what you have been through, the hardship, and matters more where you actually are financially, and where you are going. In a world of false hope, the only guarantee that I give borrowers is that I will help avoid foreclosure and retention of the home/assets, wherever possible. It is not always possible to save a home, but paying attention to what the issuer and the investor are looking for is a sounder approach than blindly asking for help.
Regards,
Zackery Mack-Westrom
Zackery Mack-Westrom is SFHDC’s Foreclosure Intervention Counselor and is committed to helping others navigate the web of information that may result in retaining their home.
Comments:
Add Your Comment
If you would like to post a comment please fill out the following information.
Commenting is not available in this weblog entry.