Mortgage Help

As foreclosure rates rise, evidence from other parts of the country indicates the number of rescue scams may be increasing. According to Alison Preszler, a spokeswoman for the Council of Better Business Bureaus, the BBB for Clearwater, Florida, received 508 complaints about local foreclosure rescue companies in the past three years with 322 coming just within the last 12 months.

Charlotte, North Carolina’s BBB office reported last year that two foreclosure rescue companies were operating; today the count is 15 and six have already had legal actions taken against them. Twenty-one new companies began operations this year in Cleveland.

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Tips for Avoiding Scams

1) Contact your lender directly if you have a problem. Do not use a foreclosure “rescue” company or debt settlement firm, particularly if they contacted you unsolicited.
2) Never make your payment to anyone but your lender.
3) If you need assistance, contact a non-profit consumer credit counseling service recommended by the US Department of Housing and Urban Development (HUD). You can find HUD-approved services here.
4) Never pay a fee for credit counseling.
5) Always review contracts before signing. Take your time to review any documents and contact a lawyer if possible.

Remember, your lender does not want to foreclose on your property. Foreclosures cost lenders a lot of money. Lenders will be flexible in helping you bring your mortgage current, particularly in today’s difficult credit environment.

She wasn’t an investor. She didn’t have a subprime mortgage. But when Jordan Fogal’s house became uninhabitable, the 62-year-old grandmother says foreclosure became her best alternative.

Fogal’s troubles began when she and her 72-year-old husband, Bob, moved to a new housing development near Houston in 2002. That first night in the new house, the dining room ceiling collapsed. Bob had pulled the plug in the Jacuzzi tub upstairs, and 100 gallons of water came crashing through the ceiling downstairs because the plumbing drains were not connected.

“That was a preview of coming attractions,” Fogal says. Later, the roof and windows leaked, the yard flooded, the shower walls started bowing out, the floor in the kitchen started sinking, and mold began to grow all over the house. The smell was terrible, she recalls, and eventually Fogal’s doctor ordered her to leave the house because of the dangerous mold levels. A construction company hired by the Fogals estimated that it would take $150,000 to repair everything. “I could afford my mortgage payment, but I couldn’t afford $150,000 in repairs,” says Fogal, who had a 30-year fixed-rate mortgage at the time. The home — appraised at $408,000 the day the couple bought it — ended up selling for $234,000 at a foreclosure auction.

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Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday.

The filings include default notices, auction sale notices and bank repossessions. The figures are the latest measure of the ailing housing market, which has seen defaults and foreclosures soar as financially strapped borrowers have failed to make payments or find buyers.

In all, 179,599 foreclosure filings were reported during July, up from 92,845 in the year-ago month, according to Irvine-based RealtyTrac Inc.

A total of 164,644 foreclosure filings were reported in June.

Associated Press via Yahoo

For some people, renting their house out can help stave off foreclosure or being forced to sell a home for less than they owe on their mortgage.

While it is difficult at current prices to cover a mortgage payment, maintenance costs, and repairs with a rental payment, a renter can certainly help cut down on the cash you pay each month. One possibility is to rent a room in the house (www.roommates.com can assist you in finding a renter). Alternatively, you could rent the entire house out and find a cheaper place to live.

First, look in your local classified ads to determine what the market rent is for a house similar to yours.

Next, figure out what your expenses are. Expenses include not just your mortgage interest / payment, but also property taxes, homeowners association dues, maintenance costs, repairs, and tenant screening. Also, factor in the fact that your house will be vacant for a period of time if a tenant moves out. If the vacancy rate in your area is 7%, multiplying this by your projected rental payment is a good place to start in forecasting what vacancy risk will cost you.

Tenant screening is very important. One bad tenant can cost you thousands of dollars in damages, eviction expenses, and vacancy expense. Check with the prospective tenants’ previous landlords and a credit reporting agency. You will need to disclose this on your rental application.

Renting a house is a complicated subject, and it is important to research this thoroughly before jumping in. Some resources that may help:

Property Management for Dummies

Every Landlord’s Legal Guide

The median sale price fell to $223,800 from $227,100 a year ago, a 1.5% decrease in the latest survey conducted by the National Association of Realtors.

The number of total home sales fell nearly 11% from a year ago, from a 6.63 million home pace to only 5.91 million this quarter.

The housing market is hurting right now. Property values are falling. Foreclosures are rising. Many people have seen their payments spike. Others are having difficulty finding a mortgage at all due to lenders tightening their credit standards.

The crisis in housing has sent shock waves throughout the whole financial system, causing the stock market to plunge and increasing the pain for everyone.

Accurate information is vital. This web site is dedicated to helping those with mortgage problems, from people facing foreclosure to customers having trouble finding a mortgage or refinancing an existing mortgage.

Please check our frequently asked questions page for answers to the most common questions.

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