Housing News

New Year, No Job, No Mortgage Payment

Jobless in 2009
It’s becoming a common situation among the laid off in 2008.

For those who had to clear their office tables and start adjusting their monthly expenses after 6-figure salaries, the reality of post-layoff blues may take its toll this year. It’s no wonder why jobless claims have risen in just as short as five months with several large companies filing for bankruptcy. The latest count estimates 4.5 million people are receiving unemployment benefits – a 27-year high in the country. Delinquencies for mortgage payments for distraught borrowers continue to be one of the burdens faced by the jobless as they run into more credit problems along the way. Meeting their financial obligations has become even harder this year.

The key to averting long-term delinquency is to be aware of the solutions that are available. Workout options vary from one lender to another and there are other services that have sprung up due to the mounting foreclosures in the country. One of the first steps is to call the lender or bank and notify them about your delayed payment. With the rising foreclosure and delinquency cases, not all borrowers will be given priority or be re-notified unlike two years ago even if it is in the lenders’ interest to put your status back on track as they earn their living from your regular payments. Borrowers need to explain everything so that their status can be evaluated and matched with the correct option.

Solutions are plenty. Repayment plans consent to purchasing the loan at current price. It allows you to repay part of the delinquency each month aside from the regular monthly payments that you have to fulfill. Just take caution if your loan has a prepayment penalty that would certainly rack up your fees. Forbearance plans on the other hand suspend payments for a limited period. In most cases, the loan payment is postponed for at least four months. The qualification may be more difficult though since the credit crunch has made more lenders austere. Then borrowers can choose to either modify their adjustable rate mortgages to fixed types or resort to refinancing depending on their situation.

It would also help to contact a credit counselor before you proceed to any action. Just be sure that they do not take advantage of your situation. Since last year, more financial counselors have aggressively preyed on delinquent borrowers. Les Christie of CNNMoney.com reveals that many for-profit firms demand high fees from clients in exchange for financial advice. In most states, a loan that has not been modified after the consultation with the lender will not have any reimbursement of the counseling fee, not even half of the expensive bill. These are legal businesses that will negotiate with the lender but the high assurance of loan modification that they guarantee does not always bear fruit.

The key here is to be aware, seek support and follow the proper recommendation.

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