Last week I wrote about the rising rate of foreclosures nationwide and cited adjustable rate mortgages as one cause.
What can you do if you are worried about your mortgage adjusting to a higher rate? Or if, due to a life-changing event, you are finding making the monthly mortgage payment difficult?
Do not follow the example from a recent article in the Washington Post.
The article stated a number of people who are behind on their mortgage, or even in the process of foreclosure, do not talk to their lender.
If you think you might have problems paying your mortgage, especially if the interest rate adjustment increases your monthly payment, talk to your lender.
But what if you are afraid to talk to your lender, or tried to talk to them, only to be told your loan was sold and they have no way to help you?
In Las Cruces, contact Alicia Alvarado at the YWCA Credit Counseling & Home Ownership Center — 532-1222 — or head over to 1401 South Don Roser, Building A Suite 1 for free confidential help.
The center offers confidential credit and budget counseling, readiness
for home ownership evaluations and free education — in English and
Spanish — for potential home buyers about the home buying process.
Says Alicia: "We recommend that anyone who feels they are having
problems paying their mortgage call us. We may be able to help them
save their home."
You can also use your computer for help. Nationwide, Neighborhood
Assistance Corporation of America (www.NACA.com) on April 11 announced
that it had received $1 billion in financing to help subprime
mortgagees.
NACA has several programs for homeowners, such as the NACA
Post-Purchase Program which combines free comprehensive counseling,
including financial and credit advice and short-term financial
assistance with your mortgage payment. See www.NACA.com for more
details.
When you talk to your lender, ask them about Freddie Mac and Fannie Mae programs that can help you.
On April 19 the Federal Home Loan Mortgage Corporation — also known as
Freddie Mac — stated the company is developing more consumer-friendly
subprime loans to be available by mid-summer. The new loans will
include 30-year and possibly 40-year fixed-rate mortgages as well as
adjustable-rate mortgages with longer fixed-rate periods.
Fannie Mae is offering new options so that lenders called "HomeStay,"
to help subprime borrowers refinance out of high-interest
adjustable-rate mortgages or other difficult loans.
The HomeStay program will let borrowers stretch the term on sub-prime
loans to 40 years from the current maximum 30 years to reduce monthly
payments for borrowers by about 5 percent.
One final tip: Be careful if anyone knocks on your door once the
foreclosure process has started. Sad to say, there are unscrupulous
investors who hope to profit at your expense.
An article titled "Scam Targets Homeowners" in the Arizona Republic on
April 22 highlights the actions of those taking advantage of homeowners
in pre-foreclosure.
After falling at least three months behind on mortgage payments, a notice of foreclosure is posted.
A "foreclosure rescuer" comes to the door, tells the homeowner they can
help, and has the homeowner sign blank documents in exchange for the
promise to stay in their home, get $10,000 in money today to help pay
their bills, and then make their mortgage payment to the rescuer.
Unknown to the homeowner, they have signed a quitclaim deed giving the
home to the rescuer, who now has the right to evict them at any time.
So beware, if someone comes knocking on your door with the promise to
help, do not sign any documents without talking to your lender or an
attorney.
Can't afford an attorney? Then call the New Mexico State Bar Public
& Legal Services Referral and Pro Bono Program for free help at
505-797-6066 or 1-800-876-6227
Annette West, CCIM, MBA, CPA is a Las Cruces commercial Realtor and can be reached at 505-644-1634 or awest@ lcnm.biz
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