Foreclosure1 Blog

Foreclosure winds are racing across the nation with some pockets being worst affected than others. Washington so far is below the national average but the apprehension is that within the next one year the numbers will rise. Predatory lending has lured many borrowers into this sub-prime loan trap that inevitably leads to foreclosures. Goaded by commissions the lenders together with their agents, burdened people with unaffordable loans without verifying their incomes. The usual borrower is hardly any match to parry the smart sales talk of agents and thus they easily fall into the trap – a human failure to realize dreams. It is the lender who should have guided the borrower. In these sub-prime loans after a honeymoon period of about two years the interest rate rises to more than double. However, there is no use crying over spilt milk. The imminent issue is what can be done to mitigate the damage here and now with positive action.

The best course for somebody who just cannot afford to keep the dream house is to immediately contact bonafide helpers before the situation worsens and the loan increases. Here, time is a very important factor. Delay will damage matters to the point of no return. Action must start before going into foreclosure. The best option is a quick sale.

The State Department of Financial Institution has set up a help line. Contact can be made over phone or through the Internet. Help agencies will give proper guidance and also open up lines of communication between lenders and borrowers.

Lenders have their own interests at stake to work for an amicable settlement. For them the process of foreclosure eats up time, money and energy. They have calculated that the loss will be less if they come to a settlement with the borrower. Countrywide Mortgage has kept aside $16 billion to assist borrowers.

A problem arises with loans having been parceled and bundled off to different lenders. If that is so then the borrower is advised to contact the firm that is servicing the loans – that means collecting the mortgage payments.

Misdeeds of loan officers should immediately be brought to the notice of the relevant state department by the sufferer so that others are also not duped.

Another point to note is that an assistance plan does not automatically mean improvement in credit rating. This side of the matter should be given due attention.