To Help Or Not To Help Foreclosure Victims – That Is The Question

March 26th, 2008 | Tags: Foreclosure Victims

To ward off foreclosures the first thing to be done is to arrange for funds. This can be done by drastically cutting expenses, selling off belongings or turning to friends and relatives. This puts the latter in an awkward position.

For instance a wife is reluctant to help her husband’s brother although both her husband and his mother feel that they should do so. But the person facing foreclosed had lived beyond his means and does not deserve sympathy – he should nowreap the harvest of the seeds he has sown. The borrower had always rolled on from one loan to another until now he had reached the end of the path and should face the consequences to learn a lesson. In some cases it is best borrowers let the house go by selling it off and starting life afresh.

There are many who cannot continue even if the mortgage is modified on reasonable lower terms, said Ken Wade, chief executive officer of NeighborWorks. It is a non-profit organization with bases across the country providing financial support as well as spreading awareness. People do not have that kind of income to see them through even a modified mortgage. In that case the relatives should take note that they should never expect to get back the money advanced. The people being helped have neither the means nor the inclination. It will just make relationships bitter. It is different with making cash gifts for higher education but here thousands of dollars are involved. The giver has every right to know about the budget in writing and how those receiving help plan to balance income with expenditure and yet survive. The giver has every right to know that the money is not going to go down the drain.

Foreclosures are not just hitting the pocket but also the hearts leading to strains within relationships between relations and friends. In some cases the borrowers have been genuine victims of predatory lending. Sub-prime mortgages were literally forced on them by agents looking around for commissions. House prices were falsely raised so as to get higher loan sanctions. The loan givers did not think about what would happen to the borrowers in the next few years – they just did not care. In such cases legal steps are being taken to sniff out the fraudulent lenders. Some big names are being dropped.