Foreclosures: Borrowers Too Are Responsible For Foreclosures

December 17th, 2007 | Tags: Foreclosures

In southeast Michigan bank foreclosures is in the doldrums – the numbers having reached tsunami proportions of late. The media has unrelentingly put on trial the sub-prime ARM’s as the prime accused in this debacle. But this is only one side of the coin. Many walked into houses they could not afford. That apart they came up against sudden contingencies like job loss, illness and or divorce. Thus without any fault as such, these people are suddenly finding themselves out in the open. A new programme has been launched by the administration that might help a selected few.

The plan released by Bush, in consultation with the mortgage giants, will freeze the rising interest for some till the next five years. The government is funding this operation and not bailing out victims. People are confused as to who will benefit from it as many pre-conditions apply.

The borrower must be current on mortgage payments. The mortgage must be an ARM that was made between 1st January 2005 and 31^st July 2007. The first rise kicks off from January 2008 and cannot come before that. The borrower must be able to honour the new monthly payments – although reduced from what it should have been as per the original loan agreement. The equity on the house in question cannot be more than 3% for one to qualify for the concession. Also the FICO score is to be less than 660.

The borrowers have to sincerely ask themselves that even with this softening – can they really afford to keep the house? There are many who could not pull along the teaser rates even. So the borrower has to be honest and face up to the blunt question of solving the problem here and now or shelving it for tomorrow.

The best thing for those in a desperate financial bind is not to bother about the qualifying relief factor but to contact the lender immediately and thrash out options. Mortgage companies are aware that their intentions of taking advantage of unwary individuals have been exposed and hence they are more than willing to make amends today.

The two options are either returning the house to the lender or to try to sell it off in a short sale. The house will go in either case but in return finances will get back to order.

Search Images:

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.