Mortgage Companies May Provide Alternatives to Foreclosure

By Karen Lawson
Local Lender Columnist
Aug 8, 2007
As property values and home equity continue to decrease in many areas, lenders are reluctant to foreclose mortgage loans. Lenders lose an average of $40,000 on each property acquired through foreclosure, and losses increase if the property isn't sold quickly.

Foreclosed homes must compete with new home sales and homes being sold by homeowners who've taken great care of their property. If you're facing foreclosure, and have little or no home equity, your lender may offer options such as repayment plans, temporary forbearance, or modification of loan terms.

Getting Your House (Payments) in Order

Mortgage payments are the larges monthly expense for most homeowners, and when trouble strikes, it may be tempting to "skip just one payment" in hopes of keeping everything else current. This often leads to more difficulty as your mortgage lender may add late charges. Once you've missed a second payment, your lender may declare your loan to be in default. Foreclosure can follow according to state law. It's important to contact your lender as soon as you know you'll miss a payment. Working out arrangements can help you avoid the additional costs and potential credit consequences caused by foreclosure proceedings. Consumer credit counselors can also help you make arrangements to repay your mortgage and other bills. A non profit credit counseling agency recently assisted approximately 100 homeowners in the Dallas area when they offered an all-day counseling session. These agencies can work with your creditors to develop an affordable household budget. If you're having problems making mortgage payments, it may also be possible use home equity financing to help with financial problems.

Source
CNN Money

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds a Master's degree in English from the University of Nevada, Reno.