Are you behind on your mortgage? Are you behind because your interest rates jumped and you can’t afford it? Are you behind because you have lost your job and had to take a lower paying job or you can’t find a job? Are your other bills on time or late? The only way the banks want to work with you is if your other bills are still being paid and on time.
Banks are in business to make money and they know there is a risk of losing money. The government shouldn’t make a bigger deficit to help lenders who aren’t going to pass the help on. The only foreclosures the banks should work with homeowners on is their primary residence. All rental property or second homes would be excluded from any workout deal. The only option for these properties would be a Deed in Lieu of Foreclosure and would state such on the consumer’s credit report. If you have questions a local notary like notary Kelowna would be a good place to start your search for answers.
Adjustable Rate Mortgages – All adjustable rate mortgages should go back to a reasonable rate based on the original information on the consumer’s credit report when he/she applied for the loan. The banks obviously decided you were worth the risk when they gave you the loan so now it’s time for them to make good on the bad they have done. If you cannot pay the new loan amount then you should have the option of the workout discussed under Fixed Rate Mortgages or a Deed in Lieu of Foreclosure.
Fixed Rate Mortgages – If you are in a fixed rate mortgage and you are facing foreclosure because you had to take a lower paying job or lost your job the banks need to find a way to work with you if they don’t want to foreclose on a house and have it sitting for a couple of years until the market turns where the house is worth as much as what you owe on it.
Lenders should take a percentage off the monthly payment and in return when you sale your house you have to give them the same percentage on any money made (profit) from the sale of the house. This simple solution would save taxpayers and the government money as well as help the homeowner stay in their home. The guideline would be simple: everyone qualifies. The bank and the homeowner work together to find a payment the owner can live with and a percentage that the bank will receive upon the sale of the house.
Before any foreclosure process can go through the court system the bank has to work with the homeowner and give the court a copy of the offers made to the homeowner. That way there has to be some type of mediation before costing the court money for taking up it’s time. Instead of foreclosures a Deed in Lieu of Foreclosure should be allowed on any property that has been for sale and has not sold. This will cost less than going through a foreclosure process for the banks and the court systems. This will also help the court systems from being swamped with bad debt cases instead of criminal processes.
The banks have to be willing to lose money in order for the FHA to back the loan and refinance homeowners who owe more money than what their houses are worth. The problem is your credit still has to look good except for your late payments on your house. If you are having problems with your mortgage payment chances are good your other bills are late as well. Even worse the program really won’t start until next year.