by
Carl Hampton
10/17/2006
It is very unfortunate that about half of
Southern Californian home owners are having
issues paying their mortgages. Some
homeowners are having to adjust to a spike
in the adjustable-rate and they cannot
handle it. For many that's a 20 percent to
30 percent increase in their home loan
repayments! Insane, isn't it, how many of us
could really manage an increase of that size
without any financial problems? The real
problem here is now the loans were sold,
most if not all loan offices fail to tell
you what will happen when the “fixed rate
period” comes to an end all they really
care about is their commission on your loan.
In Los Angeles County alone the rise in
foreclosures went up 5% and that's been the
third spike in the past three months. In
Orange County, the rate rose to 9%, in
Riverside it rose a very dramatic 52%. The
scary thing is that these foreclosure rates
are predicted by many to rise even more.
Once your lender starts the foreclosure
process it becomes public information. Any
company can then approach the homeowners.
How do you know what companies to use. This
is a very stressful time so here are some
tips that will help you. Don't pay any kind
of initial fee, if a company asks for a fee
upfront that's illegal. Before signing
anything or handing over any money please
check with the Better Business Bureau (visit
www.labbb.org) to see if there are any
complaints against that company. You should
never have to pay a company for steps that
you can take yourself, like postponing or
suspending payments.
It's not all doom and gloom there are ways
that will enable you to avoid foreclosure
and keep that roof over your head. If you
are taking some time off like a leave of
absence, unpaid vacation or you lost your
job then contact your lender and negotiate a
lower payment. Explain to them what the
situation is and see if you can be granted
extra time to pay. Better yet ask for a
temporary suspension of payment, a payment
reduction, or a repayment plan. The
important thing here is that you contact
your lender as soon as possible. If you wait
to long they are less likely to negotiate.
Instead of foreclosing ask if your lender
can extend the loan and lower the payments.
Don't jump from the frying pan into the fire
by taking out a second mortgage you can't
afford, all that will do is delay the final
outcome and put you deeper in debt. For
those of you with bad credit be prepared for
high interest rates. Seek credit counseling
there are a few free resources. The federal
housing department can be reached at (800)
569-4287 and they can recommend some good
agencies. There is a really good nonprofit
organization that will make recommendations
that could help you called Homeownership
Preservation Foundation. They can be reached
at (888) 995-HOPE. There is another
nonprofit called By Design Financial
Solutions and they can be reached at (800)
750-2227. When calling either one of these,
you should mention a default notice.
