If you are facing foreclosure and feeling overwhelmed by all the technical jargon that the bank is throwing at you, stay patient and make sure you understand everything that is going on in the process.  If you are looking to stay in your home you DO HAVE OPTIONS.  You may be running out of time but many banks and mortgage companies are becoming more and more accommodating when it comes to refinancing a loan or especially restructuring the loan through loan modification.  This is because they are dealing with so many bad loans on their books, and those non-performing loans continue to weigh down heavily on the balance sheets of many lenders.

©phanlop88 - freedigitalphotos

©phanlop88 – freedigitalphotos

These sky-rocketing number of defaults are not necessarily your fault, as many banks and lenders were guilty of predatory lending during the real estate boom.  They also made many very risky loans to borrowers with bad credit or unstable average household income.  Today they are continuing to deal with their own mistakes, although blame does not necessarily fall on the shoulders of lenders alone.

Many borrowers did not care if they were capable of repaying the loan they were going after, and became blinded by the opportunity to own property themselves, when in fact those same borrowers may have been better off renting for the time being.  There was a great deal of foreclosure fraud as well during the years of real estate inflation, as so many were attempting to capitalize on the seemingly never-ending rising property prices.  Many were guilty of trying to take advantage of the bull market, from developers to lenders and from borrowers to former renters.

Today, the United States is experiencing a virtual crash in real estate prices in many regions, and thankfully the recession is more moderate in certain regional markets than others.  The credit markets, however, are essentially broken nationwide, with many banks failing day after day as they continue to be consumed by debt, unable to dig out of these financial losses on their balance sheets.  Many homeowners are threatened by foreclosure fraud and are desperate to save their homes, and may fall prey to those predators that are out looking for steals on property prices in hopes of selling when prices stabilize in a few years down the road.

The Obama administration is doing everything it can to help stabilize the housing market in the United States.  The administration is committed to helping victims of the foreclosure crisis.  They are encouraging banks to adhere to more lenient refinance standards, and help identify loan modification scams and predatory lending practices.  It will take a number of years for this real estate market to correct organically, however the Obama administration is adamant on pursuing alternative solutions that may help the American homeowner recover and thus help stablize home prices and helping consumers get back on track.

If you think you are a victim of mortgage fraud or loan modification fraud, please contact your local authorities and report the company you were working with.  You may be able to save other homeowners from falling prey to the same schemes that may have cost you your property.  There are many loss/mitigation companies that are efficiently working with homeowners in a structured manner, and many have been very successful is postponing the foreclosure process, or helping to modify the loan altogether, thus creating a longer timeline for the borrower to restabilize the household economic situation.

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One comment

  1. Robert Urban says:

    I would be interested to know if most companies helping home owners in the foreclosure process are inclined to charge upfront fees or is that more of a red flag. Some blogs encourage folks to be leery of upfront fees. Is there a licensing process or some agency involved?

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