Foreclosure: Help! Foreclosing and What’s Next?

Posted on October 11th, 2007 by saman

Every state in the union is facing an alarming increase in foreclosures. The problem has been on the horizon for some time now. The outlying counties away form the metro areas have been facing this issue for nearly 5 years.

Insanti County, based on a Minnesota Housing study, ranks third out of a list of 20 for the highest number of foreclosures due to sub prime mortgages. The county currently has over 800 sub prime active mortgages. Nearly a quarter of those are in excess of two months behind.

LSS Counseling, a non-profit debt counseling firm since 1987, is one of the largest full-service providers of financial counseling within Minnesota. The counselors from the agency are trained to be able to assist every one, especially those entering or currently going through a financial crisis. All throughout Minnesota LSS Counseling Services has offices and is considered a “Lutheran Social Service” and serves over 62 counties statewide and helps its clients by way of the Foreclosure Prevention Assistance Program.

A subprime mortgage, the reason for all this financial ruin, is essentially something that is offered to homeowners to provide a lower mortgage rate, well below prime. The payments are typically much lower than what is the norm but then, after 24 months, without interest changing one way or the other, the payment schedule is set to increase. This is known as an “exploding mortgage”.

No one ever looks to buy a house with a sub prime mortgage, but instead as a tool to refinance. The need to add on to their current home or to make other improvements is usually the culprit here and not bad credit or a way to pay off debts.

The homeowner has a low payment for the first two years. They tend to not save and, in fact, overspend and continue to garner more debt on their credit cards. Some will buy better cars or electronic equipment. It’s essentially a quick solution to a looming problem.

If you’re in this situation and you feel the pressure to enter into a sub prime mortgage then talk to a professional such as the LSS Counseling Service. If you would like to know about them or their service then phone them at 888-577-2227. There are other places you may find useful as well such as the Consumer Credit Counseling Service of Family Means at 651-439-4840 or the National Foundation for Credit Counseling at 800-388-2227.

If you’re struggling with your current fixed mortgage you may want to contact the HUD office that services your area. They are designed to assist you in these matters without having to foreclose on your home or filing bankruptcy.

If, however, your rate is still low it is in your best interest to call a housing agency before the rate increases. This will aid you in formulating a plan of attack against the looming burden. If it’s too late for you it’s not too late to call LSS as they will make sure you aren’t being taken advantage of by the powers that be.