Released September 12, 2008
MURFREESBORO, Ark. - Homeowners having trouble meeting their mortgage obligations should address the issue immediately to avoid joining the ranks of those facing foreclosure on their homes, said Robbie McKinnon, Pike County extension agent for the University of Arkansas Division of Agriculture.
More than 4 million Americans were behind on payments or in foreclosure on their homes at the end of June - a record high, according to figures released Sept. 5 by the Mortgage Bankers Association. In Arkansas, according to RealtyTrac, foreclosures rose 2.3 percent this past July over July 2007.
"The further behind you become with mortgage payments, the harder it will be to reinstate your loan," McKinnon said. "The more payments that you are behind, the more likely that you’ll lose your house.
"Don’t ignore the problem," she said. "Contact your lender as soon as you realize that you have a problem. If you do nothing, you will lose your home."
When talking to the lender, explain your situation and be prepared to provide the lender with financial information, such as monthly income and expenses.
"Lenders do not want your house," McKinnon said. "They have options to help borrowers through difficult financial times."
The first information that you receive will usually have tips to help you recover. As letters continue, information will include notice of pending legal action. Stay in your home. You may not qualify for assistance if you abandon your property.
There could be information on services and programs offered by Government agencies as well as private and community organizations that could help you.
"Prioritize your spending. After healthcare, keeping your house should be your first priority," she said. "Review your finances and see where you can cut spending in order to make your mortgage payment."
Expenses that can be cut include memberships or entertainment-related costs. Reduce credit card payments to the minimal amount until you can get your mortgage current.
Never sign a legal document without reading and understanding all the terms.
Get professional advice from an attorney or a trusted real estate professional so that you don’t sign over the title to your property.
"Beware of scams. Solutions that sound too simple or too good to be true usually are," McKinnon said. "If you are selling your home without professional guidance, beware of buyers who try to rush you through the process. There are people who may try to take advantage of your financial difficulty."
Alternative from your lender might be special forbearance, mortgage modification, partial claim, pre-foreclosure sale or deed-in-lieu of foreclosure. Your lender will determine if you qualify for any of the alternatives.
To learn more about avoiding foreclosure or managing financial resources, contact your county extension office or visit http://www.uaex.edu and type "foreclosure" into the search engine.
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http://www.uaex.edu/news/september2008/0912avoidforeclosure.htm
Contact: Elizabeth Fortune, 501-671-2120, efortune@uaex.edu
