Foreclosure Options Coming From Lenders Crucial To Solution

Posted on May 8th, 2008 by hinson

Ramon Reyes of Cathedral City with a family and a rising mortgage has plenty to frown about. The interest on the house mortgage shot up from 5% to 7%. Most probably the curve will go on rising. Being self employed Ramon does not have a steady income to fall back upon. Adding salt to his wounds the fear is that if he refinances within three years then penalties will be slammed upon him.

Reyes is not alone. There are about 100 others like him struggling to keep the houses that are their homes as across the country the foreclosure situation worsens. They attended a workshop at Palm Desert Graduate Centre on UC Riverside last Saturday. It was organized by Fair Housing Council of Riverside County together with partner cities. Riverside is one of the worst hit regions – ranking fourth in US. US Rep. Mary Bono Mack (Rep-Palm Springs) addressed the workshop. She underlined that all have been directly or indirectly hit by the foreclosure crisis. Defaults are increasing. The counselors at the workshop stressed the need of opening up communication lines with the lenders. The idea of picking up phone calls from the bank after missing payments is not palatable especially if there is no money in the pocket. But this is the time to start the talks instead of waiting for miracles. Unfortunately nearly half of the foreclosure affected victims have not contacted their lenders. Some have not slit open the envelopes.

At this juncture the lenders are equally anxious to see that the house owners continue to stay in their homes. Often the lenders are agreeable to new arrangements with fixed interest rates, or temporary suspension of payments. They may even waive penalties so that the house may be sold before foreclosure hones in. Three or four years such talk would have been useless. But now the situation has changed. The lenders are being more amenable to talks.

The situation gets more compounded when jobs are lost or death takes a toll. These are the moments when the lender should be contacted said Angelica Arredondo of Washington Mutual. It needs the willingness and ability on the part of the borrowers to persuade the lender to reason.

The participants were told to avail of the free counseling services being offered by HUD approved agencies. Lenders are offering many options supported by the government in an all out effort to ease the foreclosure crisis.